Government loses £223m after scrapping tax disc

Total collected in vehicle excise duty fell drastically in the first six months

New figures have revealed that since the tax disc was ditched in 2014, the amount collected in vehicle excise duty by the Government fell by £223million in the first six months.

Many critics worried that getting rid of the tax disc could confuse some motorists, however, loss of revenue for the government was never expected.

Motorists in the UK now pay for their vehicle tax online and the Government has collected £2.7 billion during the first six months since the new changes were introduced in October 2014, according to figures gathered by the Financial Times.

Tax disc abolishment has cost the government millions of pounds

Tax discs were scrapped in September 2014

 

This figure is a staggering £223million lower than what the Government collected from October to March the year before.

During the same time duration, there was a 50% rise in cases against people not taxing their vehicles, according to Auto Express.

From October 2014 to March 2015, new figures gathered by the Driver and Vehicle Licensing Agency (DVLA), revealed that 117,490 prosecution cases had been brought against people for not taxing their vehicle, compared to only 86,939 cases in the six months before, when the tax disc was still being used.

Auto Express have since been told by the National Audit Office that the compliance rate is now “very high, with around 99 per cent motorists paying vehicle tax.”

A National Audit Office spokesman said: “The drop in revenue could be partly explained by more motorists switching to paying their vehicle tax through direct debit, with lower monthly payments recorded as a result. Motorists are also buying more Eco-friendly vehicles with lower tax bills.”

If you would like to know more about our nationwide car leasing services, please click here.