Friday 7 August 2020

UK faces action over HGV road user levy

The European Commission has demanded that the UK reform the HGV road user levy, which was introduced in 2014.

The charge is applied on a sliding scale basis, based on time and gross weight, on all trucks of 12 tonnes or more using UK roads. It was aimed at levelling the playing field for British hauliers, who pay motorway tolls across most of the European mainland, while trucks from abroad were using the UK’s road system for free.

Updates to the terms of the levy last year saw older, polluting vehicles required to pay up to 20 per cent more, and new Euro 6 vehicles eligible for a 10 per cent reduction.

To avoid charges of discrimination, British-registered trucks are also eligible for the levy, but enjoy a concurrent reduction in vehicle excise duty (VED), with the total amount paid annually remaining unchanged for most classes of vehicle. The charge raised the ire of Irish hauliers in particular, as some journeys undertaken to and from locations in the Irish Republic involved using roads in Northern Ireland, and paying the levy as a consequence.

Now the UK, which is still subject to most EU regulation until the end of the year under the terms of the Brexit transition agreement, has been given two months to notify the Commission of reforms to the system to remove the perceived bias against EU hauliers, or it will face action in European courts.

“The Commission… considers that this levy discriminates foreign hauliers against UK hauliers which are compensated through a reduction on the annual tax paid of vehicles registered in the UK,” said the EC in a ‘reasoned opinion’ issued last month, noting that: “the UK remains subject [during the Brexit transition] to the EU’s enforcement mechanisms, such as infringement procedures.”

The EC reminded the UK of the requirements of the Eurovignette Directive (1999/62/EC) on road charging for HGVs, which states that: “Tolls and user charges may not discriminate, directly or indirectly, on the grounds of the nationality of the haulier or the origin or destination of the vehicle.”

The move came less than a fortnight after the official Brexit date, which has been interpreted by some commentators as less-than-coincidental timing. The Daily Express quoted former Conservative leader Iain Duncan Smith as complaining: “This is basically a load of posturing by the EU to rub our noses in the fact we are still subject to EU law,” adding that the bloc could “go sing”.

The government said it would “consider” the EC’s letter and “respond in due course”. The situation could get worse post-transition, depending on the nature of any trade deal agreed – with EU nations potentially able to unilaterally impose additional charges on British-registered trucks using their roads.

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