Paperless road tax loses Britain £45m

THE DECISION to scrap the tax disc is costing the government £45m a year in lost revenue, new figures from the Department for Transport (DfT) reveal.

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The number of untaxed vehicles on Britain’s roads has more than doubled since the paper tax disc was scrapped in October last year, according to the first official study. A roadside survey, carried out in the summer at 256 locations across Britain, found that 1.4% of vehicles were unlicensed, compared with 0.6% in a survey taken two years earlier.

That equates to more than 500,000 vehicles without valid tax. The government estimates £80m a year will be lost as a result — £45m more than two years ago. The loss is far higher than the £7m of annual administrative savings it said it would make by abolishing the paper disc. DfT analysts admit that the sharper than expected increase in the number of untaxed vehicles is likely to be linked to the abolition of the disc.

Vehicle owners can no longer tell whether a vehicle is taxed by looking at the windscreen but must instead check on an online database run by the Driver and Vehicle Licensing Agency (DVLA). The new system is thought to be confusing used-car buyers in particular. Previously a car remained licensed until the tax disc ran out, no matter how many times it changed hands. Since the disc was scrapped, tax is automatically cancelled when a vehicle is sold or ownership is transferred. It is the responsibility of the new owner to tax it or face a £1,000 fine.

The DVLA said it sends out reminders to drivers who forget to license their vehicle but many of those fined complain they have never been notified of the new rules, particularly owners who pass a car on to a family member.

“These are very worrying and disappointing statistics indeed,” said David Bizley, the RAC’s chief engineer. “Sadly, the concerns we raised about the number of car tax evaders going up at the time the tax disc was confined to history have become a reality. We cannot afford for this to increase again for the sake of both road safety and the country’s finances.”

Oliver Morley, the DVLA’s chief executive, defended the policy. “Almost 99% of all vehicles on the road are correctly taxed: that’s around £6bn in vehicle tax passed to the Treasury every year,” he said. “We write to every registered vehicle keeper in the UK to remind them when their tax is due and we have introduced a range of measures to make vehicle tax easy to pay. At the same time we are taking action against those who are determined to break the law.”

Also read: Without a paper tax disc reminder, how will I know when my tax expires?

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