Ministers lose £80m in revenue after scrapping car tax discs

The government looks to have lost as much as £80m of revenue as a result of its decision to scrap car tax discs a year ago. The move has also led to a doubling in the number of unlicensed vehicles on British roads. The Driver and Vehicle Licensing Agency (DVLA) ended the need for drivers to display a valid tax disc in October 2014, saying that the move would save the taxpayer £10m a year by making the system more efficient.

However, that decision looks to have backfired, after official figures published on Thursday showed that the exchequer has lost as much as eight times the intended saving. An analysis of road users carried out in the summer showed that about 1.4% of vehicles were being driven without vehicle excise duty. This was up from just 0.6% two years ago, when a disc was still required.

The Department for Transport (DfT) estimated that about 560,000 vehicles were untaxed. Motoring organisations claimed when the measures were announced that the abolition of the tax disc after 93 years – part of the government’s purge on bureaucracy – would fail. Not everyone will rejoice at the passing of the tax disc Read more The move, which suffered a number of admin problems at the start, also led to thousands of innocent motorists having their cars clamped.

Many of those who have not taxed their car may well have failed to receive official notices reminding them to get their tax renewed in the post. Under the old scheme, the tax disc provided a visual reminder when it was due. It was also easy for police to spot untaxed cars – something that it is no longer possible. Last week it emerged that the DVLA had immobilised or towed away almost 100,000 cars in the past 12 months – a 58% rise on the previous year. It said it now posts almost 3m reminders each month, at considerable cost.
Source: Ministers lose £80m in revenue after scrapping car tax discs | Money | The Guardian

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