Car tax evasion triples after paper tax disc scrapped

Since the paper tax disc was abolished the number of unlicensed vehicles on the road has tripled.

The data, published every two years, shows that the government potentially lost out on £107m from 755,000 unlicensed vehicles last year.

The RAC said the decision to get rid of the paper tax disc three years ago has proved "costly" when it should have saved the Treasury £10m a year.

"It appears that having a visual reminder was an effective way to prompt drivers into renewing their car tax - arguably more drivers are now prepared to try their luck and see if they can get away with not paying any vehicle tax at all, or are simply forgetting to tax their vehicle when they are due to."

When the abolition of the paper tax disc was announced by then-Chancellor, George Osborne, the Treasury said it showed government was moving "into the modern age".

The RAC said a third of untaxed vehicles had changed hands since September 2016, indicating that many drivers were not aware that tax does not carry over when ownership changes.

The seller receives a refund of any full months of remaining tax while the new owner must tax the vehicle immediately.

DVLA clamping increase

Thousands of motorists have been fined or had their cars towed away after falling foul of new rules following the switch to digital tax discs.

Many are buying used cars unaware that the old paper documents are now automatically cancelled when a vehicle changes hands.

Ignorant that they must fork out for a new digital one – even if the existing paper disc is months from expiry – rising numbers of drivers are falling prey to clampers.

Critics allege that the DVLA has been operating a 'money-making scam' after figures yesterday showed clamping soared after the paperless system was introduced in October last year.

Many say the authority was too quick to penalise motorists without first warning that their car was not taxed. Drivers have faced bills of up to £800 to get their impounded vehicles back.

The DVLA was accused of 'heavy-handed and Draconian' behaviour yesterday after figures showed its use of clamping rocketed by 60 per cent from about 5,000 vehicles a month before the changes to 8,630 last month.

With no right to appeal against the fines to an independent body, drivers have little choice but to pay up. 

The DVLA is estimated to be making millions of pounds a year because it receives double road tax payment – from both the seller and the buyer.

A DVLA spokesman said: 'The changes have been widely publicised and we write to every vehicle keeper to remind them of the new rules before the vehicle tax expires.

'We also write to every new vehicle keeper when they buy a used vehicle to inform them that they must tax the vehicle before they use it. 

'In addition, if a driver does not tax their car we will send a warning letter to remind them to tax as they are at risk of enforcement action.' 

Is it now easier for motorists to get away without paying Vehicle Excise Duty?

The abolition of the tax disc October 2014 raised fears it would become easier for motorists to get away without paying Vehicle Excise Duty.

The  DVLA says that, despite some motoring organisations warning that the change could lead to a sharp rise in the number of untaxed vehicles, "the vast majority of drivers continue to tax their vehicles on time". A spokesman adds: "Since 1 October, more than 16-and-a-half million drivers have taxed their vehicles – with over 70% doing it online, more than ever before."

The DVLA is confident that the new system will not see more tax evasion. This is mainly because even before its abolition, the tax disc was not the chief means of ensuring VED had been paid.

The DVLA staff rely on its own database to see who has failed to tax their vehicles, with the keeper of an untaxed car sent a penalty notice in the post. Fines for failing to pay tax can be steep: there is a potential fixed-penalty notice fine of £50 and untaxed vehicles can be clamped, with a £100 release fee charged. A £160 surety also has to be paid before the vehicle is released, although this is refunded provided the vehicle is taxed within two weeks.

ANPR cameras are also used to catch offenders, says Ian Crowder at the AA. "There is the risk that the abolition of tax disc will encourage some people to believe these things won't be followed up," he adds. It would appear however that changes to the vehicle tax system that were introduced at the same time as the disc was phased out are catching some motorists out.

These changes meant that tax on a vehicle no longer carries over to a new owner as it did before October 2014 making it the responsibility of the buyer to pay tax immediately even if the vehicle is only part way through its current tax year. (the seller will automatically get a refund of any tax remaining when they sell it)

 "This simplifies the process of buying and selling used vehicles as now all new keepers must tax the vehicle before they use it rather than having to find out if it’s taxed or whether the seller has had the tax refunded."

2015 budget & the world of motoring

• Petrol duty frozen for fifth year 
• 0.5p-a-litre Sept increase scrapped 
• Little change in company car tax 
• Severn toll crossing reduced
• 5p cheaper fuel in rural areas
• Tax-exempt classic cars from 1976 
• £100m fund for autonomous cars

The Chancellor George Osborne announced the abolition of planned fuel duty increases in the 2015 Budget, claiming the accumulated tax freezes would save Britain's 30 million motorists £10 every time they filled up at the pumps.

It's a typically oblique political claim; cutting a planned 0.5p-a-litre increase will not save a tenner for any motorist filling a typical fuel tank of, say, 50 to 60 litres. Rather, he's referring to the planned five-year freeze on the fuel duty escalator, in real terms. But then this was very much a Budget of posturing and smoke and mirrors, as the May elections loom large.

Drivers living in rural areas may benefit from 5p-a-litre cuts, as a new countryside tax relief kicks in on 1 April 2015, the Budget also revealed today.

And Osborne announced further investment into autonomous cars and revealed Government plans to reduce the Severn road crossing toll from 2018, when it passes into public ownership.

Read on for a full analysis with carmagazine.co.uk

Paper Vehicle Tax Disc Will no Longer be Issued

For vehicle tax starting from 1 November 2014 the DVLA will be offering motorists the ability to spread their vehicle tax payments should they wish to do so, they will be able to pay vehicle tax by direct debit

• annually
• biannually
• monthly

There will be no additional handling fees for annual payments but there will be a small surcharge of 5% of vehicle tax for biannual and monthly payments. This is half of the 10% surcharge that is currently applied to 6 monthly tax discs and which has been in existence for a number of decades.

From 1 October 2014 the paper tax disc will no longer be issued. Vehicle tax will still need to be paid but with DVLA having a digital record of who has and has not paid, a paper tax disc is no longer necessary as proof that vehicle tax is paid. The vast majority of motorists pay their vehicle tax with latest figures confirming that over 99% of motorists’ tax their vehicles on time… Most on-road enforcement action is now based on using Automatic Number Plate Readers. These cameras use the number plate rather than a visual inspection of the tax disc.

The police also have access to DVLA records via the police national computer. There are significant savings for fleet operators and other businesses from not having to handle the administration of tax discs.