Toll operators fail to pass on VAT reduction

Commercial Motor
December 18, 2008

Road transport firms are bracing themselves for a double whammy of toll operators increasing charges while failing to pass on the reduction in VAT.

Severn River Crossing and Midland Expressway (MEL), owners of the Severn Bridge and M6 toll roads respectively, have increased their charges for lorries from 1 January. But the effect has been compounded by the prices not fully taking into account the recent 2.5% reduction in VAT.

Severn River Crossing will charge HGVs 70p more to cross the bridge next year, taking the cost to £16.60 per vehicle. The company says: "Toll charges have not changed due to the change in the VAT rate. This is due to the fact the tolls are set by the Severn Bridges Act and are inclusive of VAT."

Meanwhile, MEL will increase its charge for lorries on the M6 toll road by 40p to £9.40 from 1 January it says the increase reflects the 2.5% fall in VAT, but the current £9 charge remains unaffected.

Weston-super-Mare-based Peter Gould of PJ Gould Transport says the bridge company should not only have cut its toll for trucks on December 1, when the VAT came into effect, but should also have revised the higher toll, due to start in January.

"The problem is that we can only claim VAT back at 15% but they are continuing as if the VAT was still 17.5%. It doesn't seem right or fair."

Barry Proctor, of Stoke-based Barry Proctor Services, says the 40p increase in the M6 toll will not put him off using it: "The M6 is still pretty bad, traffic-wise. It's still worth our while, but they are keeping the 2.5% VAT, so it's not only the toll increase but also the extra 2.5% as well."

The Road Haulage Association says members are demanding it puts pressure on toll operators to change its policy.

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