Abolition of vehicle tax disc lands motorists with £38m bill

Motoring organisations say that new guidelines on tax refunds when cars are sold privately will generate a substantial windfall for the DVLA – at our expense.

Motoring organisations say that new guidelines on tax refunds when vehicles are sold privately will create a substantial windfall for the DVLA – at our expense.

Drivers will drop out to the tune of millions of pounds a year as a result of the abolition of automobile tax discs, motoring organisations claim.

This is due to new rules on what happens when automobiles are purchased and sold privately.

Tax no longer transferred

At present, when a auto is sold from one person to yet another, the purchaser advantages from any tax – or vehicle excise duty (VED) – remaining on the car.

But the new program obliges the purchaser to arrange their own tax to apply from the start off of the month the purchase is produced.

Sellers, meanwhile, will get a refund only for any full calendar months of unused tax.

This indicates that on the vast majority of private sales, the DVLA will successfully be collecting tax twice for the month in which they take place.

The RAC estimates that this could cost motorists as considerably as £38 million a year.

‘Law-abiding motorists penalised’;

The RAC has primarily based this on 2.73 million annual private sales, and an average monthly automobile-tax figure of £14.

RAC chief engineer David Bizley stated: “It appears extremely harsh that law-abiding motorists are the ones being penalised beneath the new rules.

“Although the typical quantity of monthly automobile tax is not that excellent it nevertheless appears incorrect that motorists should drop out and the DVLA need to benefit.

“Certainly in the 21st century we have the technologies to operate out the alter of ownership to a specific date and then calculate the exact refund and new tax to the day, meaning that motorists don’t drop out and the DVLA receives the correct amount of tax, and no a lot more.”

Both sides lose out

If a vehicle which is taxed until the finish of the year is sold on the 15th of the November, say, the seller will get a refund of just one month.

The 15 days of tax the seller has paid to cover the rest of November will be lost.

At the identical time, the buyer will have to tax the automobile from the begin of November – tax can not commence mid-month – which implies they will also spend for 15 days’ unnecessary tax.

Bizley added: “Inevitably, the DVLA will claim that they have to carry out added administration in order to refund unused tax to sellers, but certainly this does not equate to £38 million a year.”

‘Computer systems can not cope’;

Paul Watters, head of roads policy at the AA, said his organisation had warned ministers of this concern.

“Sadly the DVLA’s computer systems can only deal with tax that starts at the starting of the month,” Watters said.

He added that a lack of physical proof that a auto was taxed could produce further issues.

“If I drive an individual else’s auto and they say it is taxed, how can I be sure?” he said.

This could apply to hire automobiles or courtesy vehicles from garages, Watters added.

Prospective £50 fines

Motorists face a fixed-penalty notice of £50 if they are caught driving an untaxed auto, no matter whether they realise it or not.

The DVLA’s current alterations imply that any driver who taxes a vehicle following 1 October 2014 will not get a disc to show in its windscreen.

Tax records are now held solely online by the DVLA, and it is no longer an offence not to show a disc, even for vehicles taxed just before 1 October.

The DVLA stated it anticipated the abolition of the paper disc and reduction in attendant postage and administration costs to save around £10 million a year.

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Abolition of vehicle tax disc lands motorists with £38m bill