Car tax disc

DVLA loses £93 million after paper tax disc scrapped

Car tax discThe DVLA has revealed revenue from vehicle excise duty fell by £93 million in the year following the scrapping of the paper tax disc – significantly more even than the DVLA’s predicted VED loss.

The DVLA’s accounts show vehicle tax revenue fell from £6.023 billion in the 2014/15 financial year to £5.930 billion in 2015/16.

The RAC, which warned the DVLA about the loss in income, is now concerned the shortfall is even greater than the DVLA itself predicted. It also cites 2015 DVLA projections that revealed there could be 560,000 unlicensed vehicles on British roads – compared to around 210,000 in 2013.

The DVLA admitted in November 2015 that the number of unlicensed cars on British roads had doubled since the new paperless tax disc system was introduced.

RAC spokesman Simon Williams said: “Some may argue that a £93 million loss is only £13 million higher than expected, but this still represents an increase of £58 million on the corresponding period before the tax disc was abandoned and far exceeds the £10 million savings arising from no longer issuing tax discs.

“This loss is a significant sum and one that merits further investigation.”

The motoring organisation concedes it might be because there are more low CO2 cars on the road, but is still calling for another roadside survey of unlicensed vehicles this summer, a year earlier than it normally would occur.

“We just hope that this doesn’t prove to be the tip of the iceberg and that the figure does not keep on rising, especially as the DVLA had predicted the new system would lead to savings of £10 million.”

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