Slight decrease in road tax evasion

The government is still losing millions as a result of road tax evasion, despite a drop in the number of drivers failing to pay.

Since road tax went paperless, the rate of tax evasion has risen from around 0.6% in 2013 to 1.8% in 2017. However, for the first time since the VED rules were changed, the rate of evasion has fallen, with new Department for Transport (DfT) figures showing a drop to 1.6% in 2019.

This means an estimated 634,000 cars could be driving around the UK without valid road tax. The DfT estimates that the total cost to the Treasury could be as much as £94 million.

The DfT admits this figure is an “upper estimate” and “unlikely” to be the total loss to the Treasury, as some VED income will be reclaimed or paid later. If that sum were to prove accurate, it would be enough to pay for three councils’ annual highways maintenance budgets, which average £31.5 million, according to the Asphalt Industry Alliance.

RAC spokesman Simon Williams said the abolition of the paper tax disc had not helped the government keep tax revenue up.

“While it is good news that vehicle tax evasion has gone down, it is still significantly higher than it was before the tax disc was abolished in October 2014,” he said. 

“It’s therefore hard to see that doing away with the tax disc has been good for ensuring as many vehicles as possible are taxed for use on our roads. This all means the government is consistently missing out on very large amounts of tax revenue, which from next year will be ring-fenced for maintaining major roads in England. This time around the lost revenue figure is potentially as much as £94 million.”

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