Guide to applying for an HGV (freight) or PSV (passenger) Operator's Licence
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Video: Bank Statement Requirements for Standard Operator's Licenses
As part of your application The Central Licensing Office will calculate a sum of money based on the information you’ve provided. You must show you have at least this amount when you send your financial evidence. The required amount must've been on your account each day during 28 days. However, once your public notice has been published in a newspaper, you only have 21 days to submit your application. It is okay to submit a statement with the right amount if it has been on your account for less than 28 days but in this case you will need to submit another statement later. So, if your public notice has already been published and you have the right amount on your account (possibly for less than the 28 required days), it's better to submit your application without waiting.
Trailers don't count as 'vehicles' for the purposes of calculating your financial requirements. So if you are applying for 1 vehicle and 1 trailer, that's counted only as 1 vehicle and you need to have £8,000 on your bank account.
The required amounts for Standard licenses are as follows:
For the first vehicle: £8,000
For each additional vehicle: £4,500
So you'd need to show the following amounts based on the number of vehicles you are applying for (trailers don't count):
1 vehicle: £8,000
2 vehicles: £12,500
3 vehicles: £17,000
4 vehicles: £21,500
5 vehicles: £26,000
6 vehicles: £30,500
Each additional vehicle: £4,500
For a restricted licence, you need the following amount:
£3,100 – for the first vehicle
£1,700 – for each additional
Light goods vehicles:
£1600 – for the first vehicle
£800 – for each additional
Names on your bank statements
All financial documents should be in the same name as the person, partnership or limited company applying or the person holding the licence. Personal accounts are only acceptable for Sole Traders. For limited companies, the funds must be held on the limited company's accounts. Personal accounts won't be accepted even if they belong to a director of the limited company. For partnerships they should be in the same name as one or both of the people applying, or the licence holders. For LLPs the funds must be held within the company.
ACCEPTABLE EVIDENCE
Bank statements
You should provide original bank statements covering the last 28 days. The last date must not be more than 2 months from the date we receive your application. If you don’t have original bank statements (if you have an online only account, for example) you can provide printouts. Your bank must sign and stamp the printouts to prove they’re a true reflection of your account.
Printouts must also have:
- the account holder’s name
- the account number
- the name of the bank
- all transactions that took place within the 28-day period
You should provide original building society statements covering the last 28 days. They’re only acceptable if funds can be drawn down within one month.
Large deposits or withdrawals
If there are any unusually large deposits or withdrawals that have changed the average balance, we might ask for an explanation from the applicant or operator. The Traffic Commissioner may decide to discount these deposits or withdrawals from the average balance. Any doubts over the sources of funds will be referred to the Traffic Commissioner.
Credit card accounts
Credit card accounts must be in the same name as the person applying or the licence holder. They must be supported by original documents to show that the funds available meet the criteria over a 28-day period. If a credit card account is your only source of evidence, the Traffic Commissioner may ask why you can’t provide anything else.
They really dislike it when all you have is credit cards, lines of credit, overdraft but no cash. They want you to have at least some cash. There's no exact percentage number but 50% is probably a good estimate.
An opening balance
If you’re a new business and don’t have statements for 28 days, they may accept an opening balance, along with an explanation of the source of funds. They may ask you to submit more evidence within a certain period after the date of the grant, which is likely to be 6 to 12 months. This will give you a chance to supply three months of evidence.
Overdraft facilities
You can support your account statements with overdraft or credit facilities. They only accept formal written commitments from the bank (offers of overdraft or credit facilities aren’t enough). They will calculate the average balance shown in the statements and add it to your overdraft or credit facility, which will show the amount of credit you have. If the average balance is negative they will take it away from your overdraft limit.
Invoice finance agreements - Invoice factoring
They accept invoice finance agreements, but only if they’re accompanied by:
- confirmation of balances that are not drawn down, averaged over a three-month period
- a copy of the signed agreement from the finance company in which they agree to retain the amount of money needed to meet the definition of financial standing
- a completed schedule signed on behalf of the finance company
An agreement with a factoring company is the easiest way to meet the financial requirements if you don't have enough cash or loans from banks. Read this article for more details.
Audited accounts
Your audited accounts must:
- be certified by someone who’s properly qualified
- be drawn up clearly
- give a true and fair view of assets, liabilities, financial provision and profit or loss
Financial requirements for different types of Operator's Licenses