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Has the digitalisation of tax discs lost the DVLA £93 million?

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The Driver and Vehicle Licensing Agency (DVLA) recently released their annual report showing a 93 million drop in revenue compared to figures released in 2014/15.

Although many factors could have contributed to the significant dip in revenue, one of the biggest changes made by the DVLA since the last release of figures is the digitalisation of the tax disc.

The Government initially stated that ditching the paper discs would save the DVLA 7 million a year due to the cost of printing and distributing 30 million plus discs every year. However, a Department for Transport survey later revealed that the number of motorists failing to pay vehicle tax had more than doubled. The same survey discovered that around 1.5 percent of all vehicles were unlicensed, equating to roughly 560,000 vehicles.

As a result of this, the department statisticians estimated a loss of around 80 million.

Simon Williams from the RAC has called on the Department for Transport to conduct further studies saying, “If this were to find that the number of un-taxed vehicles is still at the same rate as when the last survey was conducted or, worse still, has increased, then action needs to be taken urgently to counter this.” 

The other 13 million in lost revenue could potentially be due to the popularisation of electric and low carbon vehicles in recent years which either pays reduced tax rates, or no tax at all.