The UK government has announced the reintroduction of the Heavy Goods Vehicle (HGV) levy, a tax on vehicles over 12 tonnes, as part of the April budget. The levy was originally introduced in 2014 to offset the costs of wear and tear on UK roads caused by HGVs. However, it was suspended in 2020 due to the Covid-19 pandemic. The government has now decided to bring it back in light of the economic recovery.
The HGV levy applies to all HGVs that use UK roads, whether they are registered in the UK or abroad. It is based on the weight and emissions of the vehicle, and the distance it travels in the UK. The aim of the levy is to ensure that all HGVs contribute to the upkeep of UK roads, regardless of where they are from.
The reintroduction of the HGV levy has been met with mixed reactions from the haulage industry. On one hand, some haulage companies are pleased that the tax has been reinstated as it means a level playing field for all companies operating in the UK. Foreign hauliers, who previously did not have to pay the levy, will now have to pay their fair share of the costs of maintaining UK roads.
On the other hand, some in the industry have expressed concerns that the reintroduction of the HGV levy could harm UK competitiveness. The UK haulage industry is already facing a number of challenges, including a shortage of drivers and increased fuel costs. The HGV levy will add to these costs, potentially making it harder for UK companies to compete with their European counterparts.
The Road Haulage Association (RHA), which represents haulage companies in the UK, has called on the government to use the revenue generated by the HGV levy to invest in the UK road network. Richard Burnett, Chief Executive of the RHA, said: “If this is purely a revenue-raising exercise, then it is just another tax on industry. But if it is genuinely about investing in our road network, then we would welcome that.”
The government has stated that the revenue generated by the HGV levy will be used to fund road infrastructure projects across the UK. The Department for Transport has said that the levy is expected to raise around £200 million per year.
While the HGV levy will undoubtedly have an impact on the haulage industry, it is important to note that it is not the only tax that hauliers have to pay. Haulage companies also have to pay fuel duty, vehicle excise duty, and insurance premium tax, among other taxes. The HGV levy is just one part of the overall tax burden that haulage companies face.
It is also worth noting that the HGV levy is not a new tax. It was first introduced in 2014 and was in place until 2020, when it was suspended due to the Covid-19 pandemic. The reintroduction of the levy is therefore not a surprise to the industry, and haulage companies should have already factored the levy into their pricing models.
In conclusion, the reintroduction of the HGV levy will have both positive and negative impacts on the UK haulage industry. While some companies will benefit from a level playing field, others may struggle to compete with their European counterparts. It is important that the revenue generated by the levy is used to invest in the UK road network, rather than simply being a revenue-raising exercise. The UK haulage industry is a vital part of the economy, and it is important that the government supports it in a way that is fair and sustainable for all.