What is the HGV road user levy? And how is it changing

 You may have seen a number of headlines about the HGV road user levy recently, thanks to a new policy announcement from the Department for Transport. To help explain the substance behind those headlines, it’s worth looking in detail at what exactly the road user levy is – and what the Government is doing to it.

What is the HGV road user levy?

The levy was introduced by the Conservative-Liberal Democrat Coalition Government via the HGV Road User Levy Act 2013. As of 1 April 2014, all lorries weighing 12 tonnes or more that drive in the UK have to pay it, whether they are registered in the UK or come here from abroad.

The amount due depends on the weight of the vehicle and how many axles it has. The annual rates for different HGVs are shown in the table below.

For UK-based hauliers, the road user levy is offset against Vehicle Excise Duty, so most were made no worse off by the introduction of the levy. The main aim was to ensure that foreign hauliers also contribute to the cost of Britain’s roads.

Levy cut for cleanest lorries

The recent news stories about the road user levy were generated by a government policy revealed in March. Roads Minister Jesse Norman announced changes designed ‘to encourage firms to phase out the most polluting lorries and bring in the cleanest ones’.

As of 1 February 2019, all HGVs that meet the latest emissions standards (known as Euro VI) will receive a 10% discount on the road user levy. Those that don’t meet the Euro VI standards will have to pay 20% more than they do now.

So, for example, a Euro VI lorry that currently faces a £1,000 levy will only have to pay £900, whereas a pre-Euro VI lorry that currently pays £1,000 will have to pay £1,200.

Bigger changes to come?

These changes may be just the beginning. In last year’s Spring Budget, the Government announced that it would ‘work with industry to update the levy so that it rewards hauliers that plan their routes efficiently, to incentivise the efficient use of roads and improve air quality.’

The Department for Transport held a call for evidence on possible reforms to the levy between November and January, but ministers have yet to bring forward any concrete proposals. Here’s what the consultation document did say, though:

‘We are interested in views on how international models could work in a UK context, for example whether a charge based on the amount of distance travelled by HGVs and by the emissions class of vehicle, could help to meet these objectives, or a differentiated time-based charge.’

Based on this, The Times reported in December that ‘Mileage and emissions-based charges could be introduced for lorries to cut traffic’ and even that ‘industry figures predicted that it would act as a test bed for a universal system for all vehicles.’

Nevertheless, six months have passed and we’re still waiting to learn what fate awaits the road user levy.