The Department for Transport (DfT) confirmed that 755,000 cars, vans and motorcycles are being driven without tax – a threefold increase since 2013.
In 2013 – the year before the paper disc was made redundant – only 0.6% of vehicles were untaxed, compared to 1.8% in 2017. While the DfT has admitted the increase ‘could’ be due to the abolition of physical tax discs, car industry commentators have wasted no time in linking the two as cause and effect.
Car tax evasion cost the government £107 million in 2017 – an irony not lost on many as the online tax renewal system was meant to save around £10 million each year. The move from a paper-based to digital system cost £1 million to implement and enforcers rely heavily on ANPR (automatic number plate recognition) to catch tax evaders.
Drivers venturing onto the roads in an untaxed vehicle face fines and hefty fees if they’re caught, their car could be impounded and they can also be taken to court. But as the cost of car insurance rises it seems that, for some, the risk of getting caught without tax is a risk worth taking, as 83,000 people haven’t taxed their car for more than a year.
Of course, there’s also genuine confusion over some aspects of car tax, or vehicle excise duty’ (VED) as it’s officially known, as you can no longer transfer ‘unused’ tax to a new owner. Instead, anyone selling their car has to claim a refund on their car tax, which is calculated from the beginning of each new month. Car buyers, on the other hand, must ensure they’ve paid their VED before they drive the new car. In reality, this means that the same car could be taxed by two people at the same time, giving the treasury an extra £40 million per year.
The government has pledged that from 2020, the money received from VED will go directly towards funding the UK road network, meaning that all drivers have an interest in making sure they pay what they owe.
However, motorists in the West Midlands and North East might need further convincing as figures show they had the highest percentage of tax evasion (2.1% and 2% respectively). This was in contrast to those in the East of England, where only 0.8% of drivers tried to get away without paying their VED.
With the cost of car ownership seeming to ever increase, it’s even more important to save where you can – without dodging your obligations – so make sure you get good value for money on your car insurance and start a quote with us today.