Why is there a shortage of HGV drivers in the UK?

The shortage of Heavy Goods Vehicle (HGV) drivers has brought heavy disruption to supply chains all over the UK. According to a survey from the Road Haulage Association (RHA), the shortage is now over 100,000. 

It’s easy to point to COVID-19 as the reason for the shortage. But even before the pandemic caused disruption, the estimated driver shortage was already at around 60,000. 

The truth is there are several factors that have contributed to this now dire situation, including:

• COVID-19.
• Retiring drivers.
• Brexit.
• Training costs and low wages
• Poor working conditions.
• IR35 tax reforms.

Though there are multiple reasons for the current HGV driver shortage, the pandemic is definitely the most recent and hard-hitting. 

The coronavirus pandemic caused many foreign HGV drivers to move back home, and the majority have not come back since. It’s easy to see why this has happened. The uncertainty caused by travel restrictions has made it difficult for foreign workers to move around without the risk of being caught in a lockdown.  

On top of the migration of foreign workers, COVID has also dramatically slowed down the UK’s HGV driver tests. There has been a growing backlog of HGV driver tests since the pandemic first hit, meaning there are tens of thousands of potential workers waiting to get certified. 

During a typical year, 72,000 candidates train to become HGV drivers, with 40,000 usually succeeding. But the shutdown of vocational driving tests over much of 2022 resulted in the loss of 30,000 test slots, and only 15,000 finished their training successfully. 

Another big factor for the HGV driver shortage is the lack of new drivers compared to retiring drivers.   

In general, the job just isn’t attracting as many young people as it needs to. According to the RHA, the average HGV driver is 55, but less than 1% are under 25. Their figures also state that about 2,000 drivers leave the job every week, while only 1,000 recruits are joining.

Alongside the high number of retirees and the COVID disruptions, Brexit can’t be ignored as a major factor contributing to the shortage of HGV drivers in the UK. 

The RHA report claims that the “uncertainty of Brexit and future rights to work in the UK” has caused around 20,000 European workers to abandon HGV driving in the UK. 

As a part of the EU, the UK used to be part of the EU single market, allowing drivers to move freely between EU member states. But new immigration laws in the wake of Brexit mean the UK is not allowed that privilege.

The lack of new drivers can also be attributed to the fact that it isn’t an enticing career option for young people. 

Training to be a HGV driver can cost anywhere from £4,000 to £7,000. And while the average annual salary for a driver tends to be £30,000 to £40,000, new drivers can only expect a salary of between £19,000 and £24,000. 

The high cost of training and relatively low wages means that HGV driving is seen as too expensive to get into with too little benefit, making it a much less attractive career option for young people. 

According to the RHA’s survey, working conditions are also a significant factor. 

Poor depot facilities and the negative treatment they receive from the public are making HGV driving an all-around unappealing career choice.

IR35 is a piece of tax legislation designed to stop companies from employing contractors as “disguised employees” to avoid certain tax kinds. 

Before IR35, many HGV drivers could take advantage of the tax loophole by setting up limited companies and working for themselves as contractors, allowing them to avoid higher rates of income tax and national insurance contributions. 

The changes brought on by IR35 mean that HGV drivers have seen a considerable decrease in their overall earnings. 

The UK government has announced several plans to help combat the shortage of drivers. 

A temporary visa scheme was introduced, offering 4,700 foreign drivers with UK-recognised HGV licences to work in the UK until 28 February 2022.

As well as the temporary visas, the Government is trying to increase the number of active HGV drivers by:

• Providing support and training for new HGV drivers.
• Expanding HGV driver testing capacity and improving licencing processes/
• Attracting drivers back to the sector and improving conditions.
• Freezing vehicle excise duty for HGVs until 2023.
• Suspending the HGV road user levy until August 2023.

They’re also trying to limit the negative effects of the shortage by:

• Ensuring the stability of the fuel supply chain.
• Increasing efficiency in existing supply chains.

The shortage of HGV drivers has brought disruption to small businesses all over the UK, so it’s more important than ever to practice better financial management. Thousands of business owners have already started using the Countingup app to make their financial admin easier. 

Countingup is the business current account with built-in accounting software that allows you to manage all your financial data in one place. With features like automatic expense categorisation, invoicing on the go, receipt capture tools, tax estimates, and cash flow insights, you can confidently keep on top of your business finances wherever you are. 

You can also share your bookkeeping with your accountant instantly without worrying about duplication errors, data lags or inaccuracies. Seamless, simple, and straightforward! 

Find out more here.