Heavy goods vehicle (HGV) levy suspension
Published 27 October 2021
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This publication is available at https://www.gov.uk/government/publications/heavy-goods-vehicle-hgv-levy-suspension/heavy-goods-vehicle-hgv-levy-suspension
Who is likely to be affected
Registered keepers of heavy goods vehicles (HGVs) registered in the UK, and drivers and owners/operators of HGVs from outside the UK accessing the UK road network.
General description of the measure
Collection of the levy will be suspended for a further 12 months from 1 August 2022. HGV Levy rates will also remain frozen in 2022 to 2023.
Policy objective
This measure will reduce financial liabilities for UK and foreign hauliers operating in the UK from 1 August 2022, the intention being to have positive effects on the UK’s economic recovery from coronavirus (COVID-19).
Background to the measure
The levy was introduced in 2014 and re-designed in 2019 to better meet the environmental objective of improving air quality. It has been suspended for 24 months from 1 August 2020 to support the haulage sector as it recovers from COVID-19.
It will be suspended for a further 12 months from 1 August 2022, and HGV Levy rates will also remain frozen in 2022 to 2023.
Detailed proposal
Operative date
This measure will take effect from 1 August 2022, extending the existing HGV Levy suspension.
Current law
Current law is contained in section 5(2) and section 6(2) and section 7 of the HGV Road User Levy Act 2013.
Proposed revisions
This measure amends section 88(3) of the Finance Act 2020 so as to define the exempt period as 36 months beginning with 1 August 2020 instead of 24.
Summary of impacts
Exchequer impact (£m)
| 2021 to 2022 | 2022 to 2023 | 2023 to 2024 | 2024 to 2025 | 2025 to 2026 | 2026 to 2027 |
|---|---|---|---|---|---|
| — | -145 | -80 | -10 | -10 | -10 |
These figures are set out in Table 5.1 of Autumn Budget 2021 and have been certified by the Office for Budget Responsibility. More details can be found in the policy costings document published alongside Autumn Budget 2021.
Economic impact
This measure is not expected to have any significant macroeconomic impacts. It will help to support the haulage sector in 2022 to 2023.
The terms used in this section are defined in line with the Office for Budget Responsibility’s indirect effects process. This will apply where, for example, a measure affects inflation or growth. You can request further details regarding this measure at the email address listed below.
Impact on individuals, households and families
This measure reduces the costs for registered keepers of HGVs registered in the UK, and drivers and owners/operators of HGVs from outside the UK and operating on a commercial basis. The measure has no disproportionate impact on other individuals. The measure is not expected to impact on family formation, stability or breakdown.
Equalities impacts
This measure reduces costs for both UK and foreign hauliers. As such, no impact on the equality of groups sharing protected characteristics has been identified.
Impact on business including civil society organisations
This measure is expected to have a positive impact on around 100,000 UK based operators of HGVs, in addition to foreign operators of HGVs operating in the UK, by not requiring them to pay the levy for 12 months. One-off costs will include familiarising themselves with the change, which is expected to be negligible.
There are not expected to be any continuing costs. Customer experience is expected to remain broadly the same as this measure does not significantly change existing processes.
There is expected to be no impact on civil society organisations.
Operational impact (£m) (HMRC or other)
The costs are expected to be minimal. There will be a marginal cost to the Driver and Vehicle Licensing Agency (DVLA) in changing the system to manage the suspension.
Other impacts
This is a temporary measure and is not expected to impact air quality as it should not influence the decisions around which vehicles are purchased.
Other impacts have been considered and none has been identified.
Monitoring and evaluation
The measure will be kept under review through communication with affected taxpayer groups.
Further advice
If you have any questions about this change, contact the Energy and Transport Taxes Team at the following email address: ETTAnswers@HMTreasury.gov.uk.