Financial standing period of grace rises to a year

Operators struggling to meet financial standing requirements could now have a 12-month period of grace to get themselves on a firmer footing.

Laura Hadzik, solicitor at Backhouse Jones, said the maximum period had been extended by six months to 12 months “for assessments of inadequate finance made between 1 March and 30 September 2020”.

She added: “We understand that the senior traffic commissioner will be updating the statutory documents to provide further guidance on this in due course.”

Current guidance for operators on financial standing states: “Where a standard licence holder cannot demonstrate financial standing Regulation (EC) 1071/2009 allows but does not require the traffic commissioner to provide a period of time to rectify the situation.

“The operator may be given a limited time to make written representations before the traffic commissioner decides whether to allow time for rectification and for what period by way of a notice served under the legislation.”

James Backhouse, director at Backhouse Jones said: “The obligation to meet financial standing is mandatory so it’s important that if for any reason you can’t, you work up the strategy for meeting it, you notify the traffic commissioner of the position and you request a period of grace.”

A spokesman for the Office of the Traffic Commissioner said: “To help operators during the coronavirus lockdown, the DfT has temporarily relaxed EC 1071, enabling traffic commissioners to grant periods of grace up to 12 months.

“The Senior Traffic Commissioner will consider updating the relevant statutory directions as to how this will be applied in the near future.”