Was abandoning the tax disc a mistake?
Many of us have made the mistake of making false economies, in which a supposed means of saving money has had the opposite effect. It appears that the DVLA may have made a similar error.
When it was decided to save costs by abandoning the paper VED tax disc in October 2014, the agency anticipated that there would be a slight dip in revenue, caused by the general public adapting to the new regime.
Unfortunately, the DVLA did not foresee that tax receipts would plummet by £93 million, £13 million more than its original estimate. Unfortunately, the administrative saving of £10 million does not come close to making up the shortfall.
In its defence, the DVLA reported that not only have people taken time to get to grips with the changes but that some used car buyers were also unaware of the new policy that Vehicle Excise Duty cannot be transferred and a new owner must re-tax the car again immediately. It also cited lower emissions of new cars as reducing the tax take. The authority also admitted that a new monthly Direct Debit may be another reason for the shortfall, although those adopters tended to pay a higher total of annual VED, instead of a single annual payment.
Nonetheless, the DVLA also admitted that removing the disc has made evasion easier, because a passing officer cannot check for the presence of a valid disc in the windscreen, which was a concern that I have held for some time, despite theories that ANPR cameras make evasion more difficult. Additionally, the DVLA has reported concerns that the evasion figure might continue to rise, meaning that further action is needed to understand the cause and restore lost revenue.
I wonder what action that might be? Bringing back the old-fashioned paper disc, perhaps?