The law requires a traffic commissioner to be satisfied that vehicle operators have enough financial resources to run their businesses and maintain their vehicles properly.
The traffic commissioner must be satisfied that there are sufficient financial resources to maintain vehicles properly and, in the case of applicants for a standard licence, to run the business. This is a continuing requirement and traffic commissioners may check at any time to ensure that the requirements are being met.
Rates for financial standing are calculated on an annual basis, in accordance with EU Regulation 1071/2009. It is for operators to ensure that they continue to meet the revised rate and demonstrate this when either new applications are made or when requested to do so by a traffic commissioner e.g. at five year continuation intervals. The traffic commissioner will measure the evidence against the current financial levels required for a licence.
The level of financial standing is set by legislation and the total sum is based on the number of vehicles multiplied by the current statutory figure. The figures below are current and came into effect on 24 December 2019.
On 24 December 2019 the Office of the Traffic Commissioner confirmed the levels against which applications and continuations would be assessed from the start of 2020 as below;.
There are no changes to the rates of finance, which must be available to support a licence or application. Therefore, operators will continue to be required to demonstrate rates of finance as follows:
- Standard national and international licence applicants will be required to demonstrate £8000 for the first vehicle and £4450 for each additional vehicle they request to be authorised.
- To support a restricted licence or application operators will be required to show £3100 for the first vehicle and £1700 for each additional authorised vehicle.
- Operators making variation applications will be required to demonstrate financial standing for their existing fleet and any additional authorisation against these levels.
- Any applicant or licence holder appearing at public inquiry before a traffic commissioner after 1 January 2020, where evidence of financial standing is requested, will be required to continue to satisfy these levels.
Therefore if you are applying for a new licence for 5 vehicles, the following will apply:
Standard National or International Licence
First vehicle - £8,000
Plus 4 additional vehicles - £17,800
Total required to be accessible - £25,800
First vehicle - £3,100
Plus 4 additional vehicles - £6,800
Total required to be accessible - £9,900
Evidence which can be used to show financial standing
Most operators use bank statements to prove their financial standing. However, if recent statements do not show finance at the new levels, an operator will need to check whether there is any other evidence that will be accepted.
The Senior Traffic Commissioner’s Statutory Guidance document on finance gives more information about the financial evidence which may be used The main ones are:
- Building Society accounts
- Credit card statements
- Overdraft facilities
- Invoice finance agreements
- Audited accounts
- Assets that can be sold quickly (except for the vehicle fleet)