Car Tax Evasion Tripled Since Paper Discs Scrapped


November 2017

Car Tax Evasion Tripled Since Paper Discs Scrapped

New figures from Transport For London show that the amount of untaxed vehicles in the UK is three times higher than before the abolition of the paper tax disc three years ago.

The new figures indicate that roughly 1.8% of motorists neglected to pay or renew their vehicle tax which amounts to a total of nearly 700,000 untaxed vehicles. According to government estimations, it is thought that the treasury could be losing as much as £107m every year in unpaid tax.

Ever two years the DVLA undertakes roadside tests to detect any vehicles that are not paying car tax. In 2013 the untaxed rate was 0.6%, growing to 1.4% in 2015 (the first year following the scrapping of paper tax discs) and is now at an all-time high of 1.8%. The DVLA have also reported twice as many vehicles being clamped for having unpaid tax than in the year prior to paper tax discs being removed.

The new measure was brought in by then chancellor George Osbourne, with the treasury claiming it was showing a transition into the modern age. The measure was intended to save the government around £10m ever year in administration costs, however the RAC have said that the decision to remove the paper tax discs has proved costly.

"The principle of abolishing the tax disc to introduce greater efficiencies has, so far, evidently failed," said RAC public affairs manager Nicholas Lyes.

"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."

The Driver & Vehicle Licensing Agency (DVLA) was warned at the time that getting rid of the traditional method would result in confusion as well as increase in tax evasion. One of the main arguments for keeping them was that they serve as a clear reminder for those to renew as well as giving a clear indication of who was avoiding payment.

According to the RAC one third of untaxed vehicles had changed owners since September 2016. This indicates that some drivers are not aware that tax does not continue, once ownership of a car has been passed on.

In regard to tax evasion by area, the West Midlands had the highest rate with 2.1% of all vehicles being unregistered, this was closely followed by the North West which had a rate of around 2%. The East of England was found to have the lowest in terms of tax evasion with only 0.8% not paying. All other areas fell between 1.6%-1.8%.

The Department of Transport commented on the findings, saying “The vast majority of motorist’s tax their vehicles correctly and we have made it easy to do it online – and to spread the costs using direct Debit. As DVLA’s current campaign stresses, driving a vehicle without taxing is breaking the law and the DVLA will continue to crack down on drivers who do.”