Road tax evasion could cost Government £119 million | Industry - Car News Dec 2021

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21:24 Friday 03 Dec 2021

The cost of vehicle excise duty (VED) evasion is estimated to be up to £119 million this year, with an estimated 719,000 untaxed vehicles (excluding motorcycles) in the UK.

The latest report from the Department for Transport (DfT) suggests 85,000 more drivers are dodging road tax than in 2019 when there were estimated to be 634,000 untaxed vehicles (or 1.6 per cent of all vehicles on the road).

Estimates are now at 1.8 per cent, based on a roadside survey using automatic number plate recognition (ANPR) cameras at 267 sites in June and early July.  

Before the DfT abolished the paper tax disc in 2014 and ended the process of transferring tax between vehicle just 0.6 per cent of vehicles were untaxed. 

RAC head of roads policy Nicholas Lyes said that the increase in the number of unlicensed vehicles is “hugely concerning”. 

“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,” he said. 

“The cost from 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.”

Julie Lennard, DVLA chief executive, said: “We work hard to drive down vehicle tax evasion and the vast majority of motorists are doing the right thing with over 98% of vehicles on the road taxed correctly. 

“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, wheelclamping and the removal of untaxed vehicles.

“You can tax your vehicle using our quick and easy online services – available 24/7 – and the costs of vehicle tax can be spread throughout the year by opting to pay in instalments by direct debit, which is a popular choice with nearly 15 million vehicles taxed this way in 2020.”

The DfT said that some of the estimated £119 million of potential revenue loss over one year will have been recovered by DVLA enforcement activity or by vehicle keepers paying arrears of VED at a later date. 

That means the ‘real loss’ to the Treasury is unlikely to be as high as £119 million and that figure is an 'upper estimate'. 

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