Motor Vehicles: Excise Duties

Department for Transport written question – answered at on 4 December 2017.

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Photo of Lord Kennedy of Southwark Lord Kennedy of Southwark Shadow Spokesperson (Housing), Opposition Whip (Lords), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Home Affairs)

To ask Her Majesty's Government whether car tax evasion has increased since tax discs in cars were abolished; and what action they are planning to take in response.

Photo of Baroness Sugg Baroness Sugg Parliamentary Under-Secretary (Department for Transport)

The vehicle excise duty evasion statistics 2017 estimated the rate of unlicensed vehicles in traffic in the UK to be 1.8%. Vehicle excise duty evasion was estimated to be 1.4% in the previous survey in 2015. In the last three years, there have been three significant changes in the way vehicle excise duty is administered. The tax disc was abolished in October 2014 and at the same time the ability to transfer vehicle excise duty when a vehicle is sold or transferred was removed. Earlier this year, significant changes were also made to the way vehicle excise duty is calculated for brand new cars and some motorhomes.

However, more than 98% of vehicles on the road are properly licensed, meaning that the vast majority of drivers comply with their legal obligations. It has never been easier to license a vehicle online and motorists can also spread payments across the year using direct debit. The Driver and Vehicle Licensing Agency (DVLA) collects around £6 billion in vehicle excise duty for HM Treasury each year.

The DVLA operates a comprehensive package of measures to tackle vehicle excise duty evasion. These range from reminder letters and fixed penalties, through to court prosecutions and the wheel clamping or removal of unlicensed vehicles. The DVLA has increased the number of unlicensed vehicles it clamps or impounds to around 10,000 every month and will continue to take action against those who do not pay. This enforcement work means that a significant amount of the potential lost revenue is recovered – last year enforcement activities recouped £41 million.

A major national advertising campaign has also recently been launched which targets vehicle excise duty evaders.

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