1 Weaknesses in the current system
1. Evasion of Vehicle Excise Duty (VED) rose to 5%
(£214 million) in 2006-07 according to the Department for
Transport's annual roadside survey, up from 3.6% in previous year.[2]
The Driver and Vehicle Licensing Agency (DVLA) had two targets
to address the problem:
- to reduce evasion loss to 2.5%
by December 2007; and
- to reduce the June 2002 figure of persistent
evaders by 50% by 31 January 2007.[3]
2. The DVLA does not understand the reasons for the
increase in VED evasion and acknowledges that it was unlikely
to meet its targets.[4]
The current level of evasion is high and a disincentive for others
to continue paying their VED. The structure of the VED regime
and charges overall are determined by the Chancellor of the Exchequer.[5]
The Department's VED Collection and Enforcement Governance Board
is responsible for deciding allocations of enforcement resource.[6]
3. The DVLA has focussed its efforts to counter evasion
on enforcement "from the record", using its vehicle
and keeper records to monitor current VED status,[7]
and to send enforcement notices to vehicle keepers. This has done
much to reduce evasion amongst motorists who are recorded on the
DVLA's database and to maintain the £5 billion VED raised
each year.[8] The DVLA
has a lot more difficulty taking enforcement action against vehicles
and motorists who are not recorded on its database. Non-registration
may arise from a failure to inform the DVLA about a change in
personal details or the purchase or disposal of a vehicle, failure
to re-licence or failure to declare a vehicle off-road.[9]
Non-registered vehicles have to be caught evading "on-the-road"
to enforce the VED regime and such enforcement can act as a deterrent
to others tempted to try evasion.
4. The DVLA's monitoring systems have not kept up
with changing patterns in evasion. For example, evasion of congestion
charging and the use of false, foreign or cloned plates are relatively
new problems of growing significance in some areas, although no
official figures exist. The DVLA relies mainly on the annual roadside
survey of one million vehicles passing fixed points across the
UK. The survey is undertaken in June each year to check observed
vehicle registrations against the DVLA's records. The survey provides
a snapshot of changes in evader behaviour and the DVLA subsequently
adjusts its enforcement activity accordingly.[10]
5. Under the current re-licensing arrangements, even
vehicle keepers who comply with the regulations can easily avoid
one month's VED at each renewal point (six-monthly or annually)
without risk of penalty. The situation arises because enforcement
action by late licensing penalty notice is not initiated until
two months after the expiry of the previous licence.[11]
For those who do receive a late licensing penalty, the regulations
and procedures do not require renewal of VED and many people receiving
penalty notices still do not re-licence. The DVLA does not target
this category of evaders to collect the VED due for the period
missed. Nor does it take any action as those people approach the
next renewal date for the vehicle in question.[12]
6. Fewer local post offices now offer VED renewal
services, and take up of electronic and telephone renewal of VED
has been increasing rapidly. It currently stands at 40% of all
transactions, with a reducing public demand for renewal at the
post office. The Post Office decides which of its branches provide
re-licensing services, consistent with the DVLA's overall requirement
for geographical coverage. Not all branches can provide the VED
renewal service as it is not economic for the Post Office and
not all branches have sufficient expertise. The DVLA has routine
discussions with the Post Office about services which could be
performed by local branches rather than the DVLA.[13]
2 Review of Vehicle Excise Duty Evasion Statistics,
Transport Statistics, 4 October 2007 Back
3
Secretary of State targets as set out in the DVLA's 2006-07
Business Plan Back
4
Qq 39, 67 Back
5
Q116 Back
6
C&AG's Report, para 4 Back
7
Q 38 Back
8
Qq 3, 40 Back
9
Q 46 Back
10
Q 70 Back
11
Q 21 Back
12
C&AG's Report, paras 54-55 Back
13
Qq 98, 118-120 Back
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