DVLA under fire after tax change

DVLA under fire after tax change

The DVLA has been criticised over new rules in effect now the tax disc has been scrapped.

The RAC believes it is "law-abiding motorists" who are losing out under the vagaries of new system. The tax disc became obsolete on October 1, meaning that tax on privately sold vehicles is no longer transferable. It has been estimated that this could come at a cost of £38 million to motorists across the country.

Drivers previously had the option of selling their vehicle with the remaining months left on the disc transferring to the new owner.

This is now no longer the case and sellers will instead receive an automatic refund on the remaining months. The new owner will have to get their own tax before they can drive the vehicle.

The way we buy tax has not changed, with people still able to purchase and renew online or at the post office.

Critics say the new rules hit both the buyer and seller in the pocket. Buyers have to tax their new vehicle from the start of the month irrespective of what day of the month they purchased it on. Sellers, meanwhile, only receive a refund on complete calendar month's worth of unused tax.

This means that the DVLA receives a double tax benefit on every vehicle that is not sold on the first day of a month.

Figures based on the 2.73 million privately sold cars in 2012 show that this would generate an additional £38 million in tax revenue. This is based on an average monthly car tax figure of £14.

RAC chief engineer David Bizley said: "It seems very harsh that law-abiding motorists are the ones being penalised under the new rules. While the average amount of monthly vehicle tax is not that great it still seems wrong that motorists should lose out and the DVLA should benefit.

"Surely in the 21st century we have the technology to work out the change of ownership to a specific date and then calculate the exact refund and new tax to the day, meaning that motorists don't lose out and the DVLA receives the correct amount of tax, and no more."

"Inevitably, the DVLA will claim that they have to carry out additional administration in order to refund unused tax to sellers, but surely this does not equate £38m a year, especially as it was estimated the scrapping of the tax disc would save £10m a year, presumably on administration, printing and postage.

"Perhaps this also explains why the DVLA does not seem overly concerned about the risk of increased evasion because they have insured against this by extracting extra tax revenue from motorists."

Copyright Press Association 2014