DVLA saw £200m loss in revenue following digitation of tax disc

Written by Rebecca Hill on 10 June 2016 in News
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The UK collected £200 million less vehicle tax in the six months after the paper tax disc was abolished, in comparison to the previous year.

According to figures obtained by the Financial Times, the move to a digital system – which took place in October 2014 – caused a loss in revenue for the Driver and Vehicle Licensing Agency.


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It reports that between October 2014 and March 2015, £2.7 billion was collected in Vehicle Exercise Duty, £223m lower than the amount collected between October and March 2014.

It adds that between April and September 2014 – just before the change – it collected £3.2bn, which was comparable to the previous year.

Figures for the whole year October 2014 to October 2015 are expected to be made public after the EU referendum on 23 June.

The DVLA’s latest annual report puts the cost of digitising the service at £1m.

In that report, the National Audit Office said that the change to digital has “likely contributed to an initial increase in reported levels of non-payment”. This will have caused the DVLA to resort to an increased use of its debt collection agency Marston Holdings, the FT said.

Oliver Morley, DVLA chief executive, said: “Almost 99 per cent of all vehicles on the road are correctly taxed: that’s around £6bn in vehicle tax passed to the Treasury every year.”

“We write to every registered vehicle keeper in the UK to remind them when their tax is due and we have introduced a range of measures to make vehicle tax easy to pay — such as direct debit or online. At the same time we are taking action against those who are determined to break the law.”

Image credit: Flickr - brett jordan

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Tax Payer (Cross!!) (not verified)

Submitted on 10 June, 2016 - 15:11
This after the double taxation scam! (If you privately transfer a vehicle from one owner to another you are almost inevitably double charged for one month). Shouldn't we be saving Oliver Morley's salary, as I doubt that this is the cost case he approved. Amusing that you talk about breaking the law, Oliver - cf Electronic Trading Regulations (2002) and examine your own conscience first, mate - (the reference to an email address). It is unclear as to whether the e-Licences are actually legally issued, which could cause a several BILLION problem. (Isn't respect for Law a British value?)

Phil J (not verified)

Submitted on 10 June, 2016 - 18:00
When comparing £223m to £6bn it seems a tiny proportion but even if all these vehicles are cars in the highest band that's 433,000 untaxed vehicles in 6 Months nearly 1million year on top of those that were previously untaxed that's shocking.

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