O-licence financial standing hike for 2017

By Categories: NewsPublished On: Wednesday 7 December 2016

The Office of the Traffic Commissioner (OTC) has outlined the levels of financial resources that fleet operators and operator licence applicants will need to demonstrate from 1 January.

The so-called ‘financial standing’ requirements – which are designed to ensure operators are sufficiently funded that corner-cutting in safety-critical areas such as vehicle maintenance does not become necessary to make ends meet –  are calculated each year against the euro exchange rate, as per EU rules.

While recent years have seen the required sums reduced for standard licence holders, considerable changes in the exchange rate mean significantly increased levels of financial standing requirements.

Standard national and international licence-holders will therefore need to demonstrate finance of £7,850 for their first vehicle and £4,350 for each vehicle thereafter – up from £6,650 and £3,700 respectively in 2016.

There is, however, no change to restricted operator licence-holders’ required financial standing, which is calculated domestically – and remains at £3,100 for the first vehicle, and £1,700 per additional vehicle.

For operators struggling to meet the new rates who can neither afford to reduce their fleets, the option is available to ask the traffic commissioner (TC) for time to address the situation – known as a ‘period of grace’.

TCs can grant up to six-month grace periods to allow operators to prove their financial standing – but they will need to see evidence that standing will reach the required level by the end of the period, and of overall financial stability.