Temporary extension to road haulage cabotage
Published 27 October 2021
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This publication is available at https://www.gov.uk/government/publications/temporary-extension-to-road-haulage-cabotage/temporary-extension-to-road-haulage-cabotage
Who is likely to be affected
Non-UK operators of heavy goods vehicles (HGVs) that transport goods into and within Great Britain for the purposes of hire and reward.
General description of the measure
Cabotage is the transport of goods between two places in the same country by a transport operator from another country for the purposes of hire and reward. It is restricted both in the UK and abroad; the rules (applicable to EU operators only) currently allow two cabotage journeys within 7 days of entry into the UK.
The government will temporarily extend road haulage cabotage to allow, until 30 April 2022, unlimited cabotage movements of HGVs within Great Britain for up to 14 days after arriving in the United Kingdom on a laden international journey.
This measure will make temporary changes to Vehicle Excise Duty (VED) legislation so that the relevant non-UK operators travelling in Great Britain do not need to start paying VED.
Policy objective
This temporary extension to road haulage cabotage is expected to help alleviate pressures in the supply chain associated with the current shortage of HGV drivers. It would not be effective if the relevant non-UK operators of HGVs were expected to pay VED for the first time.
Background to the measure
The Department for Transport (DfT) consulted, from 14 October 2021, on the proposals to temporarily extend road haulage cabotage. The government confirmed these changes on 27 October.
Detailed proposal
Operative date
The changes will come into force on 28 October 2021.
Current law
The Motor Vehicles (International Circulation) Order 1975 exempts from excise duty certain vehicles brought temporarily into the UK. This includes exemptions from paying VED for goods vehicles imported temporarily for the purposes of cabotage. The definition of the exemptions from VED are defined with reference to existing cabotage rights.
Proposed revisions
An exemption from VED will be extended to cover additional temporary cabotage rights. The exemption applied will last until 30 April 2022 and encompass unlimited cabotage movements of HGVs within Great Britain for up to 14 days after arriving on a laden international journey into the United Kingdom.
Summary of impacts
Exchequer impact (£m)
| 2021 to 2022 | 2022 to 2023 | 2023 to 2024 | 2024 to 2025 | 2025 to 2026 | 2026 to 2027 |
|---|---|---|---|---|---|
| Nil | Nil | Nil | Nil | Nil | Nil |
This measure is not expected to have an Exchequer impact.
Economic impact
This measure is not expected to have any significant economic impacts.
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 has no impact on individuals as it relates to the transport of goods or passengers for the purposes of hire and reward. This measure is not expected to impact on family formation, stability or breakdown.
Equalities impacts
It is not anticipated that there will be equalities impacts in relation to any groups sharing protected characteristics.
Impact on business including civil society organisations
This measure is expected to have a temporary positive impact on non-UK operators of HGVs that transport goods into and within Great Britain for the purposes of hire and reward. One-off costs could 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)
This measure is expected to have a negligible operational impact.
Other impacts
This is a temporary measure and is not expected to have any significant air quality or climate change impacts.
Other impacts have been considered and none has been identified.
Monitoring and evaluation
The measure will be monitored by DfT and HM Treasury through communication with relevant stakeholders.
Further advice
If you have any questions about this change, please contact the Energy and Transport Taxes Team at the following email address: ETTAnswers@HMTreasury.gov.uk.