UK motorists losing millions owing to new car tax system confusion: AA

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UK’s motorists are losing out almost £38 million a year due to confusion over the new car tax system introduced in October, the country’s biggest motoring organization, AA, has said.

According to AA, the major confusion has been caused because tax discs displayed on vehicle windscreens for nearly a century have been scrapped and replaced by the new online system.

It is believed that drivers are paying an extra £38 million a year because of the new system as some vehicle owners are already being ‘double-taxed.’ They have paid tax twice on a vehicle for the same month after they have transferred the tax license to a different name.

Under the new system, a car tax is automatically cancelled when a vehicle changes hands. The old owner can claim back in tax only full months and not part ones, with the new owner required to tax the car immediately.

The motoring organization said it had heard of cases where a car was transferred from one member of the family to another but the family was shocked to find that VED was not refunded for that month, and yet the new owner had to purchase VED for the full month.

“Hence the family were paying tax twice for the same month on what has become a ‘doppelganger’ vehicle,” the AA said.

The AA found that less than two months before the October changes, 42 per cent of a sample of 18,000 of its members knew nothing about them. Meanwhile more than half (51 per cent) did not know that unexpired tax could not be passed on and 60 per cent did not know about automatic cancellation of the tax disc.

The AA said this had contributed to a 71 per cent increase in the number of cars clamped for being untaxed, up from 5,115 in February last year to 8,741 this February. In March 2015, 8,360 cars were clamped for not having road tax, compared to 5,333 in March 2014.

“October’s abolition of the vehicle tax disc and a new process for transferring a vehicle’s ‘keeper’ is a massive change after 90 years of the old and familiar system,” AA president Edmund King said.

“We are particularly disappointed that there was not an equally massive communications campaign to ensure the UK’s 35 million drivers got the message.”

“UK drivers now pay ‘double tax’ for the month that a vehicle changes hands and the DVLA’s clampers are now netting 3,000 more untaxed cars a month than this time last year,” Edmund added.

“It is right that those who deliberately evade paying vehicle tax are caught and punished. But it is a very harsh lesson for those who may not be aware a tax disc is now automatically cancelled when a vehicle changes keepership.

“AA members have contacted us expressing outrage that their apparently taxed car was not taxed despite it having a valid disc on display. The DVLA must adopt a cautious and more flexible approach to enforcement during this transition.”

A Driver and Vehicle Licensing Agency spokesman said “Ending vehicle tax at the point of sale is a consumer protection measure to prevent used-car buyers unknowingly buying or keeping an untaxed vehicle which they believe to be taxed.

“Previously, two-thirds of all used vehicles were sold without tax so it is no different for the majority of motorists.

“Any potential revenue gains are offset by automatically refunding more motorists. Between October 2014 and January 2015 we refunded around £120 million, which is more than double the amount in the same period a year before.”