The Comptroller and Auditor General (C&AG) has released his annual report on the Driver & Vehicle Licensing Agency’s collection of Vehicle Excise Duty (VED). VED is tax which must be paid for most types of vehicles used, or kept, on public roads in the United Kingdom. In 2022-23, the DVLA Trust Statement recorded £7,418 million of VED and enforcement revenue, an increase of £202 million on 2021-22 levels.
The C&AG’s report this year concludes positively on how DVLA has carried out its core tax collection responsibilities.
It also describes how:
- Changes announced by the government in November 2022 in relation to Vehicle Excise Duty (VED) exemptions for zero emission and electric vehicles have led to a significant increase in the OBR forecast of future VED revenue which had previously been expected to plateau from 2024-25 as uptake of ultra-low emission vehicles continued to increase. The OBR forecasts that revenue will now continue rising from 2024-25 into 2027-28.
- Activity on the roads has stabilised with the daily number of cars on the road at around pre-pandemic levels through 2022-23. New registrations have stabilised after significant disruption in 2020-21 due to the pandemic, though at a lower average level. The DVLA believe this sustained decrease is due to drivers retaining the same vehicle for longer periods on average.
- Enforcement action by the DVLA continues to trend back towards the levels observed in 2019-20, with prosecutions now 9% below that level having increased from an 85% drop in 2020-21. Overall, enforcement action by the DVLA remains 6% lower than in 2019-20, with a total of 1.65 million enforcement actions.
The C&AG recommends the DVLA uses findings from meetings with Devolved Power Partners (DPPs) to understand the key factors impacting their enforcement activities and inform the new strategy in tackling wilful and persistent evaders regarding the effective collection and administration of VED more generally.
The C&AG’s Section 2 Report (pages 76-85)