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Sir John Bourn, Head of the National Audit Office, today reported to Parliament on the Vehicle Excise Duty (VED) accounts for 2005-06.

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The VED evasion rate increased from 3.4 percent in 2004 to 3.6 percent in 2005 (£147 million). This reversed the previous decrease, and the Driver and Vehicle Licensing Agency (DVLA) acknowledges that it may not be able to meet its targets of 2.5 percent evasion by December 2007 and halving by January 2007 the “vehicle underclass” – users who persistently do not comply with their legal obligations.

The DVLA could not run its usual advertising campaign prior to the roadside survey in June 2005 because of the general ban on Government advertising prior to the Election in May. This is a plausible explanation of the increase in VED evasion, as measured in June. The DVLA aimed to reduce the June 2006 evasion level to 3 percent through a new advertising campaign and using debt collection agencies to enforce Late Licensing Penalties, a measure intended to deter evasion. The results of the June 2006 roadside survey will be available in the autumn.

The DVLA’s target of a £70 million increase in VED by 2007-08 was achieved in 2004-05.

Motorcyclist evasion of VED

The 2005 roadside survey found that motorcyclists are by far the most likely to evade VED, with an estimated 29.6 percent evasion. For 2006, the DVLA are targeting additional measures at motorcyclists including advertisements, fitting out all the DVLA’s vans to safely seize unregistered motorcycles and enforcement and education activities at motorcycle rallies and shows.

Non-payment of Late Licensing Penalties

In 2005-06, Late Licensing Penalty notices and subsequent civil court action left some 619,000 Penalty non-payment cases (48 percent) that were not pursued at all because of court time constraints, and only 10 percent of cases taken to court led to payment. The DVLA in June 2006 started an enforcement trial using debt collection agencies to increase both the scope of enforcement and likelihood of collection, supplemented by wheel-clamping teams. The success of this trial will be evaluated next year.

"It remains a concern that the long-standing and significantly higher VED evasion rates amongst motorcyclists may threaten the public’s confidence in the DVLA’s even-handedness of treatment and enforcement of this tax.

"There is potentially a credibility issue if repeat non-payers of VED sense that nothing further will happen to them, and the DVLA is hopeful that the use of debt collection agencies will address this perception. I am pleased that the DVLA has also agreed to consider the NAO’s suggestion of a trial of further reminders targeted at longer term non-payers.

Sir John Bourn


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