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Evasion of Vehicle Excise Duty (VED) rose to 5% (£214 million) in 2006, up from 3.6% in 2005. Amongst motorcyclists, the evasion rate increased to 38% from 30% the previous year.
The Department for Transport oversees the Driver and Vehicle Licensing Agency (DVLA) which is tasked with tackling evasion. The Agency accepted that it would not achieve its targets of reducing evasion to 2.5% by December 2007 and saving £70 million a year by the end of 2007-08.
Not licensing a vehicle and registering the keeper increasingly reflect the intention to avoid congestion charges and prevent identification of criminals, as well as evasion of payment of VED.
The Department and the DVLA were surprised by the increase in the evasion rate in 2006. This calls into question the effectiveness of the DVLA's current enforcement approach and whether it understands patterns of and motivations for evasion well-enough to design fully effective counter-measures.
Working with partner organisations, such as the police and local authorities is the most effective way to tackle persistent evaders. Greater data sharing with other interested parties would help to identify emerging trends and patterns in evasion. In the medium term the Department and the DVLA may need to move to increasingly advanced technological solutions to VED evasion.
On the basis of a report from the Comptroller and Auditor General,[1] we took evidence from the DVLA and the Department for Transport on: weaknesses in the current system; tackling persistent evaders and motorcyclists; emerging threats to VED and enforcement, false and foreign number plates.
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