TaxAdministrationMillion driver loophole through road tax

Million driver loophole through road tax

More than a million drivers a year are exploiting a loophole which allows them to pay less road tax

The Driver and Vehicle
Licensing Agency
(DVLA) has been aware for at least four years of a loophole
in the enforcement of the vehicle licensing law, which enables more than a
million drivers to pay less road tax, but has failed to close it, costing
taxpayers tens of millions of pounds in lost revenue.

DVLA issues automatic £80 fines to drivers who do not renew their tax discs,
but if drivers skip a month’s tax and renew their disc at the beginning of the
second month, they will not be sent a fine and they can repeat the evasion every
six months, The Times reports.

The
Public
Accounts Committee
is publishing a report today calling on the DVLA and
Department for Transport to ‘strongly consider’ tougher measures to tackle
evasion such as imposing penalty points.

The report notes DVLA’s performance in handling persistent evaders is ‘poor’,
reducing numbers by only 4%, to 930,000 in 2002-05. A target to halve the number
who avoid official registration altogether was removed by the department last
year.

Further reading:

More than 700 businesses call for end to fuel tax

Anger over Treasury’s £3bn fuel tax windfall

Read
story in The Times

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