DVLA reports revenue loss after tax disc abolition

The DVLA is reporting a £93m loss in revenue after the paper tax disc was abolished.

The DVLA is reporting a £93m loss in revenue after the paper tax disc was abolished. - Credit: PA

The DVLA's annual accounts have shown a £93m loss in revenue after the paper tax disc was abolished.

The government had initially estimated that the changeover from paper tax discs to the online format would lose £80m over the course of 2015.

The findings have shown that revenue generated from vehicle tax fell from £6.023bn at the end of March 2015 to £5.93bn a year later.

RAC spokesman Simon Williams said: 'It is worrying that the reduction in revenue from vehicle tax has exceeded the government's own estimate. Some may argue that a £93m loss is only £13m higher than expected, but this represents an increase of £58m on the corresponding period before the tax disc was abandoned and far exceeds the £10m savings from no longer issuing tax discs.

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

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The RAC is pushing for a roadside survey of unlicensed cars to take place to find out how many motorists are evading paying tax. These individuals heavily contribute to the figure of vehicle tax lost each year.

Mr Williams added: 'Now that paper tax discs have disappeared from the windscreens of vehicles, payment is logged within the DVLA database, and the country's network of automatic number plate recognition cameras are relied upon to catch motorists who avoid paying – deliberately or not – together with a debt-collection agency, which is used to chase non-payers.

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'It would be extremely worrying if we were to find out that car tax evasion has increased from the 560,000 figure estimated in June 2015. 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 £10mn.'

Do you have an opinion about stopping issuing tax discs? Email motoring@archant.co.uk

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