Death of tax disc cost the Government £223m in first six months ~ station of gear

Critics warned scrapping the UK tax disc may cause confusion among motorists. It also cost a lot of money

2016-06-10 13:10

Vehicle excise duty collected by the Government fell by £223million in the first six months after the tax disc was scrapped, new figures reveal.

Since October 2014, motorists have paid vehicle tax via an online portal, and figures obtained by the Financial Times show the Government collected £2.7billion in revenue after the first six months following the change. That's £223million lower than the amount collected between October and March a year earlier. Critics worried the overhaul of the tax disc would cause confusion among motorists.

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Auto Express previously reported a 50 per cent rise in enforcement cases for untaxed vehicles during the same time period. Figures obtained from the Driver and Vehicle Licensing Agency (DVLA) showed 117,490 enforcement cases for untaxed vehicles had been created between October 2014 and March 2015 compared to just 86,939 in the previous six months when the tax disc was still in operation.

However, the National Audit Office has since told Auto Express the compliance rate now remains “very high, with around 99 per cent motorists paying vehicle tax”. The spokesman from the National Audit Office added: “The drop in revenue could be partly explained by more motorists switching to paying their vehicle tax through direct debit, with lower monthly payments recorded as a result. Motorists are also buying more eco-friendly vehicles with lower tax bills.”

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It’s estimated more than 10million motorists now pay their car tax via direct debit. A spokesman from the DVLA told Auto Express, the Government has several ways to take action against motorists who haven’t paid their car tax.

He said: “We write to owners notifying them to pay their tax, and if this doesn’t work, we can issue late penalty fines. We can also catch untaxed motorists through automatic number plate recognition cameras.”

Do you pay your vehicle tax via direct debit? Do you find the new system easier to use? Tell us in the comments below...

Martin Saarinen

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