Motor Vehicles: Excise Duties

HM Treasury written question – answered on 23rd January 2015.

Alert me about debates like this

Photo of Richard Graham Richard Graham Conservative, Gloucester

To ask Mr Chancellor of the Exchequer, what the reason is for the additional charge for payment of vehicle tax by direct debit over 12 or six monthly instalments; and for what purposes the funds from that additional charge are used.

Photo of Priti Patel Priti Patel The Exchequer Secretary

Motorists who buy a six month vehicle excise duty (VED) licence have historically paid a ten per cent surcharge.

The Government has introduced a direct debit scheme for the payment of VED, to allow families and businesses to spread their tax payments. Under the scheme, the surcharge has been halved to five per cent when the tax is paid by six monthly and monthly instalments. The retention of a surcharge prevents a loss in VED revenue which would otherwise need to be made up elsewhere, by either increasing other taxes or reducing the Government’s investment in public services.

All VED revenues are paid into the Consolidated Fund to support general expenditure on public services.

The Chancellor of the Exchequer keeps all taxes under review as part of the annual Budget process.

Does this answer the above question?

Yes1 person thinks so

No2 people think not

Would you like to ask a question like this yourself? Use our Freedom of Information site.