O-Licence Financial Standing for HGV Operators

Work out the figure for your own authorisation below. The calculator reads the same published amounts as the table and shows every line of the arithmetic.

Restricted

Carrying only your own goods, in your own name, as part of a business that is not haulage for hire or reward.

Standard national

Carrying other people's goods for hire or reward within Great Britain, plus your own goods.

Standard international

Carrying other people's goods for hire or reward in the UK and abroad. Light goods vehicles between 2.5 and 3.5 tonnes used internationally are authorised on this licence and carry their own amounts.

The distinction that catches people out is hire or reward. Carrying your own goods, in your own business, on your own account, is restricted work. The moment you carry somebody else's goods for payment, including subcontracted haulage for another operator, you need a standard licence and the higher amounts that go with it.

The Office of the Traffic Commissioner asks for at least one accepted form of evidence, and bank or building society statements covering the last 28 days are the usual route.

• Bank or building society account statements covering the last 28 days.
• Credit card accounts.
• A formal written agreement from your bank confirming an agreed overdraft or credit facility.
• Invoice finance agreements.
• Audited accounts certified by properly qualified persons.

GOV.UK is explicit that financial standing is not a fee but resources that must be available for the duration of the licence. A Traffic Commissioner can ask you to demonstrate it at any point, and commonly does at a five-year review, on a variation to add vehicles, or where something else has drawn attention to the operation.

The practical consequence for an accountant is that the balance sheet is a licensing document as well as a tax document. Where money is moved out of the business as drawings or a dividend in the weeks before a check, the check is what finds it.

Adding a vehicle to a standard licence adds to the amount you have to keep available, on top of the deposit, the monthly finance payment, the insurance and the working capital the extra truck consumes. It is worth putting the licence figure next to the cash flow figure before signing anything, which is what the small fleet service is set up to do.