Boom in Car Tax Evasion as Tax Discs Disappear
Half a million cars avoiding tax is leading to over a hundred million pounds of lost revenue reports David Hencke.
The abolition of the need for every car and van in the UK to display a car tax disc has led to the tripling of the number of untaxed cars and soaring prosecutions and fines for drivers, according to the latest annual report of the Driver and Vehicle Licensing Agency (DVLA).
The scale of the problem led to a report from the new auditor general, Gareth Davies, to be attached to its annual accounts this year after the agency’s previous unblemished record in collecting car tax became tarnished.
A roadside survey in 2017… showed that there were 755,000 untaxed vehicles – with half of them over 10 years old.
Until 2014, when the car tax disc was abolished, the agency collected up to 99.6% of revenue. Since then, the figure has fallen to 98.2%, which might seem small but is equivalent to an additional 500,000 vehicles evading tax. This is happening because people are telling the DVLA that their vehicle is stored off the road but are continuing to use it.
As a result, the agency has decided to incentivise cash-strapped police forces to try and enforce the law – by asking them to do police checks on the DVLA computer for vehicles they suspect are avoiding tax by pretending to be off the road.
But, just over half of police forces – 37 of the 44 in England and Wales – have so far agreed to do so, despite being offered to keep all the money from fines, impounding vehicles and from selling the impounded cars at auctions.
A roadside survey in 2017, due to be repeated this summer, revealed the scale of the problem. It showed that there were 755,000 untaxed vehicles – with half of them over 10 years old. The lost revenue amounted to £107 million a year.
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The 11 worst areas for untaxed cars and vans are: London, Northern Ireland, Birmingham, Manchester, Glasgow, Sheffield, Nottingham, Cardiff, Bristol, Leicester and Coventry.
In London, some 122,000 cars were either clamped or their owners faced penalties. In Northern Ireland, it was 74,360 and Birmingham 55,000.
Ironically, revenue from car and van tax has increased despite this loss of revenue.
Latest figures saw prosecutions rise 171% since 2014, wheel clamping for persistent offenders rise 115%, out of court settlements rise 165%, and penalties rise 75%. “Stickering”, where a notice is stuck on a vehicles to say it is untaxed, also rose by 109% over the same period.
Ironically, revenue from car and van tax has increased despite this loss of revenue. It is now expected to rise to £7.4 billion by 2022 despite new car registrations falling by 12% since 2016. The main reason is that people are hanging on to their cars for longer with scrappage rates falling, so are paying more tax on higher polluting vehicles.