LDF, a leading finance provider, is to launch a new funding solution to meet urgent demand from truck and van drivers to help with managing the rising costs of road taxes on their HGV fleets.

The new funding package from LDF will allow businesses to spread the costs of both Vehicle Excise Duty and the newly-introduced Road User Levy across a 12-month term, freeing up cash for them to invest in growth.

LDF explains that the combined cost of these two road taxes can add up to £1,850 per year for a single vehicle in the largest class of Heavy Goods Vehicles. Major hauliers and other businesses with large fleets of vehicles may be paying more than £3 million per year in road taxes alone.

LDF adds that even for smaller haulage businesses, finding tens of thousands of pounds to pay up-front for road taxes can be a significant burden.

LDF says that there is strong demand for a funding product to help haulage businesses manage their cash flow through road tax renewals. They have been under significant financial pressure in recent years as fuel, another major cost, has increased sharply in price, with over three years of near all-time highs.

Recent research found that the UK has some of the highest costs of fuel in the world, with the 59% rate of tax on diesel the highest of any developed economy.

LDF adds that British road hauliers’ incomes have also been under pressure from foreign competitors that benefit from lower operating costs in their home countries.

Peter Alderson, Managing Director of LDF, says: “Road haulage is an industry where cash flow is under constant pressure, due to a combination of high fuel prices, taxes and overseas competition, and this new funding is our response to the needs of our clients in the industry.”

“The cost of fuel in particular is an enormous burden on businesses that rely on fleets of vehicles, mostly due to the rates of tax charged, and our clients have told us that the additional up-front costs of road taxes can be a real pinch point in their cash flow.”

“The banks have never been overly enthusiastic funders of the sector, and since the credit crunch, bank loans have been even more difficult for road hauliers to access. That has impacted almost everyone, from the biggest logistics businesses to individual white van operators.”

“Whether a business has three trucks or three thousand, having the ability to spread the cost of road taxes across a full year can ease the burden on cash flow, and free up funds to make more important investments in extra capacity or modernisation.”

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