Operator Licensing – are you compliant?
Once a company, partnership or person (sole trader) has obtained a Goods Vehicle Operator Licence it is vital that they fully understand and appreciate the obligations that they have entered into. Surprisingly, our findings show that the vast majority of operators that complete the initial application rarely read through and ensure that they understand exactly what is expected of them. There is a list of obligations contained within the application and required to be printed off and signed off, as part of the online application process.
The declaration made and the obligations entered into
If you are the holder of a goods vehicle operator licence, whether as a sole trader or as part of a partnership agreement, or working for a company that is a limited entity that has been granted a licence, can you honestly say that you know what declaration you made and what are the obligations that you agreed to abide by throughout the life of the licence? In fact, can you lay your hands on a copy of the original application form, so that you can check?
The operator should keep a copy of all documentation relating to the licence, including printing off the initial online application. If a goods vehicle operator licence compliance audit is carried out in relation to your business, one of the questions that the auditor must ask is “is the original licence application information available?”
Financial standing 2019
Another area of the licence requirements that is often overlooked once a licence has been granted is the obligation to ensure that the appropriate levels of financial standing remain available throughout the life of the licence. Traffic commissioners must revoke a standard licence if it appears that the licence holder no longer satisfies the requirement to be of the appropriate financial standing.
The rates are calculated each year against the Euro exchange rate, as required under EU Regulation 1071/2009. Over several years, the amount of money for standard licence holders to show evidence of finance had reduced. But, that trend ended on 1st January 2017 when the minimum amounts of financial standing required by standard licence applicants and holders increased dramatically and raised again from 1st January 2018 and again this year, on 1st January 2019.
Standard licence: First vehicle £8,000.00 and for each additional vehicle £4,450.00.
Restricted licence: First vehicle £3,100.00 and for each additional vehicle £1,700.00.
While it is understandable that operators are unlikely to keep a separate bank account running that has the above amount in it and is not touched, it is nonetheless expected that an operator can genuinely have the amount available, if required. This fund is there to ensure that the fleet is operated in a safe and compliant manner throughout the life of the licence, irrespective of the commercial position of the operator at any one time.
If an operator ever finds that they are struggling to comply with this obligation they can ask the traffic commissioner to give them time to address the situation. This is called a ‘period of grace’ and up to 6 months can be granted by the traffic commissioner, to enable an operator to show that the financial standing levels can be achieved on a regular basis.
If you are operator that is concerned regarding financial standing we would strongly advise that you contact the traffic commissioner and if neccessary request a period of grace.
You will need to give evidence that:
- it will be worthwhile by providing details about the overall financial stability of your business
- you will be able to show financial standing at the required level when the period of grace comes to an end
If you have a margin on your licence you could also consider reducing your authorised vehicles.
If you are in any doubt as to what will be accepted as satisfactory evidence of the financial position of an operator we would recommend that you consult the Senior Traffic Commissioners Statutory Document No. 2 that lays out in detail the finance aspects of the licence. This document can be viewed and/or downloaded at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/483575/statutory-document-2-finance.pdf
Truck UK can provide ‘in-company’ presentations of a CILT accredited Operator Licence Awareness Course (OLAC) to ensure that all your management team understand what the obligations of holding an operator licence entail and to ensure that directors named on the licence are under no illusion as to the levels of responsibility and accountability they have committed to. Attendance at this course will be accepted as satisfactory to fulfil an undertaking entered into between and operator or applicant and the Traffic Commissioner. For more information call 01832 274762 or e-mail: firstname.lastname@example.org