Case study – Financial standing
22 February 2023
Case study
Did you know that operators who fail to meet the financial standing requirements on an ongoing basis risk having their Operator’s Licence revoked by the Traffic Commissioner? Unfortunately, this is something that the Team see all too often in that a number of Operators are failing to satisfy the financial standing requirements or who simply do not appreciate how financial standing is assessed and/or the sources of funds that will be acceptable.
We recently dealt with an Operator who was called to Public Inquiry for the sole issue of financial standing. Due to a number of financial and personal matters, it was clear that financial standing was not going to meet both as an average over the required three-month period or as at the date of the Public Inquiry itself.
As a result of submissions made on behalf of the Operator with a clear plan to ensure that financial standing could be met on an ongoing basis, the Traffic Commissioner granted a three-month period of grace to allow the Operator to be able to demonstrate that financial standing was met on an average balance over the required three-months. As a result, a robust plan was put in place which involved the re-financing of the Operator’s assets.
For our BACKup members, the legal fees for this sort of work would be covered under your BACKup membership. You can find out more about that here.
What is it all about?
Financial standing is a continuing obligation throughout the lifetime of an Operator’s Licence which is routinely checked as part of the application stage (for new licences or variations to existing licences), the five-yearly renewal/continuation of the Operator’s Licence or if an Operator is called to Public Inquiry.
How much is required?
The current financial standing rates are:
• £8,000 for the first vehicle and £4,500 for each additional vehicle for applicants for, and holders of, standard national/international Operator’s Licences.
• £3,100 for the first vehicle and £1,700 for each additional vehicle for applicants for, and holders of, restricted Operator’s Licences.
You can find out more here and use our calculator to give you a basic idea here.
Further information about the Statutory Guidance can be found here.
If you already know you do not meet the required financial standing levels, you are obliged to inform the Traffic Commissioner. We can assist you in making the relevant notification to the Traffic Commissioner and requesting a period of grace to provide you with the much-needed breathing space to get your HOUSE in order. Contact our Regulatory team on 01254 828300. You can find out more about them here.
