How to Prove Financial Standing to the Traffic Commissioner

If you’ve ever applied for or updated an Operator Licence, you’ll have come across the term financial standing. But what exactly does it mean — and how do you prove it?

Whether you’re applying for a new Restricted Licence, making a change, or facing scrutiny at a Public Inquiry, demonstrating financial standing is a non-negotiable requirement.

In this post, we’ll explain:

• What financial standing is and why it matters

• The minimum amount you need to show

• What evidence is accepted

• When and how to submit it

• What happens if you fall short

• Tips for small business operators and Restricted Licence holders

Let’s break it down.

💷 What Is Financial Standing?

Financial standing is your ability to show that you have enough money available to:

• Keep your vehicles safe and roadworthy

• Cover the ongoing costs of your transport operation

• Maintain compliance even in quiet months

The Traffic Commissioner wants to know that you’re not running on fumes — and that your vehicles won’t be cutting corners on safety to save cash.

📊 How Much Money Do You Need to Show?

The minimum required levels are set by the Department for Transport and updated annually (usually in January).

As of 2025, the rates are:

Licence Type	1st Vehicle	Each Additional Vehicle
Restricted	£3,100	£1,700
Standard National / International	£8,000	£4,500

So, for example:

• 1 vehicle = £3,100

• 2 vehicles = £4,800

• 3 vehicles = £6,500

These figures are not one-off costs. You must be able to show that these amounts are available at all times — not just when applying.

📄 What Counts as Acceptable Proof?

The most common and reliable form of evidence is:

✅ Original bank statements

• Dated within the last 30 days

• Showing the minimum amount of accessible funds

• In the name of the licence holder (or director if sole trader)

You can use:

• Business current account

• Personal current account (if you're a sole trader)

• Business savings account (if accessible)

Other acceptable documents (only if supported properly) include:

• Overdraft facility letters – must show limit and availability

• Loan facility letters – showing approved funds and access

• Credit agreements – such as invoice finance or leasing

• Audited accounts – if showing clear available funds

❌ What’s not accepted:

• Invoices or projected income

• Unconfirmed loans

• Assets like vehicles or property

• Credit card limits

🗂️ How to Present Your Evidence

When submitting evidence of financial standing:

• Include at least 1 full month of bank statements

• Highlight or annotate the daily closing balances

• Use a cover letter to explain the account and who it belongs to

• If using multiple accounts, add the totals together and explain

Sample Summary Table:

Account Name	Type	Balance
JS Transport Ltd – Business	Current Account	£2,900
John Smith – Personal	Current Account	£1,950
Total		£4,850

Attach this with your bank statements and include a short covering letter.

🕒 When Do You Need to Prove Financial Standing?

Situation	Do You Need Proof?
New licence application	✅ Yes
Adding more vehicles	✅ Yes
Licence continuation (every 5 years)	✅ Usually
DVSA or OTC request following compliance concerns	✅ Yes
Public Inquiry	✅ Absolutely

If your business model or finances change significantly, be prepared to submit fresh evidence at any time.

🔎 What If You Can’t Meet the Minimum?

Falling short of the financial standing requirements is a red flag to the Traffic Commissioner.

You may:

• Be refused a licence or variation

• Have your existing licence revoked or suspended

• Be asked to explain your business model at a Public Inquiry

• Be ordered to reduce your authorised vehicles

This is why many operators proactively monitor their available funds monthly — not just at application time.

💡 Tips for Staying on Top of Financial Standing

1. Maintain a healthy bank balance

   – Use accounting software or spreadsheets to track monthly cash flow– Keep a reserve buffer (e.g. 20% over the required amount)

2. Avoid mixing business and personal funds

   – This can complicate evidence and raise red flags– Keep records clean and separated

3. Prepare evidence in advance of licence changes

   – When adding a vehicle, gather statements ahead of time

4. Communicate with the OTC

   – If your finances take a temporary dip, explain the situation clearly– Don’t wait for them to chase you — be proactive

5. Talk to your accountant or adviser

   – They can help present your finances clearly and accurately– They may suggest credit arrangements that can supplement cash reserves

👩‍🏫 Example Cover Letter Template

Re: Financial Standing Evidence – Licence ABC1234Dear Office of the Traffic Commissioner,Please find enclosed the financial evidence for our business in support of [our application to vary our licence / licence continuation / recent DVSA enquiry].Included are:1 month of original business current account bank statementsPersonal current account statement (as sole trader)Summary table of accessible funds totalling £4,850We meet the financial standing requirement of £4,800 for 2 authorised vehicles.Should you require any additional information, please don’t hesitate to get in touch.Yours sincerely,John SmithJS Transport Ltd

🧠 Final Thoughts

Proving financial standing isn’t just paperwork — it’s your way of showing the DVSA and the Traffic Commissioner that you can afford to operate safely and legally.

Even Restricted Licence holders must meet the same standard — and falling short puts your entire operation at risk.

So:

✅ Know your required amount

✅ Monitor your accounts

✅ Keep clean, current evidence

✅ Be ready to submit it at any time

It’s not just about numbers — it’s about credibility.

Next in the series:👉 Cash Flow Forecasting for Small Transport Operators