- 7th December 2021
- Posted by: Suzy Hill
- Category: Personal Tax, Business News
Tax-dodging drivers expected to cost Treasury £119m
The latest Department for Transport (DfT) figures show that 1.9% of vehicles in the UK are unlicensed and being used which amounts to £119m in potential lost car tax
The latest roadside survey data revealed that around 719,000 vehicles are currently evading vehicle excise duty (VED) this figure compares to 634,000 unlicensed vehicles (excluding motorcycles) estimated in 2019.
Most of the untaxed vehicles were PLG (Private, Light Goods) vehicles, which account for £114m of the missing revenue, goods vehicles accounted for £1.4m, buses £0.3m, and other tax classes £0.7m.
The breakdown of survey results also reveals that 55% of offenders had been unlicensed for two months or less, which suggests that many drivers are deliberately avoiding paying tax rather than simply forgetting to renew it, 38% were 10 or more years old, and 9% were less than two years old.
This reported tax revenue lost is up from £35m reported in 2014 when the paper tax disc was abolished, at the time the Government said scrapping the tax disc would eventually save the Driver and Vehicle Licensing Agency (DVLA ) £7m per year. The agency said that some of that estimated lost revenue would be recouped through fines or drivers paying for their tax late.
Driving a vehicle without tax usually carries a fine of £80, although the maximum punishment is a £1,000 fine. The DVLA can also clamp and seize untaxed vehicles, which brings extra fees to release the vehicle.
Responding to the latest figures, Nicholas Lyes, head of road policy at RAC said: ‘It’s hugely concerning that we’re seeing ever greater numbers of unlicensed vehicles on the roads with the total number now standing at nearly three-quarters of a million.
‘While we’d like to think the abolition of the paper tax disc back in 2014 isn’t responsible, the fact remains evasion has increased significantly since then to the point where a shocking two in every 100 vehicles on the road aren’t taxed.
‘The cost from Vehicle Excise Duty (VED) evasion in 2021 alone is set to be a whopping £119m, a substantial sum that should be spent on improving our road network. We urge the DVLA to step up enforcement and to do all it can to bring evasion down, as it is clearly not fair on those who do pay their fair share to drive on the road.”
The motoring company AA states that it possibly may be economic pressures that could be behind some drivers’ attempts to avoid paying tax.
Jack Cousens, head of roads policy, AA, said: ‘High inflation, particularly with pump prices that refuse to drop despite big falls in the wholesale cost, always pressures many low-income drivers to run the gauntlet and not pay their tax. It is foolish for them to chance their arms because the penalties are severe, even potentially having the car crushed.’
The DVLA state that it is working to catch those dodging the road tax,
Julie Lennard, chief executive of DVLA said: ‘Estimated evasion rates fluctuate, and the pandemic is highly likely to have impacted some motorists’ behaviours. Those who choose to evade will be tackled using our proven package of comprehensive enforcement measures.
‘These include penalties and court prosecutions through to the use of automatic number plate recognition cameras, wheel clamping and the removal of untaxed vehicles.’