Beware of 'ghost' car tax

Posted on: 21/05/2015

Double-taxing cars for the month they change hands, because previous owners can only claim back full months of unused tax and a new owner must tax the vehicle immediately, is generating a £38 million windfall for the Government, the AA estimates.

October’s abolition of the tax disc continues to haunt other car buyers who are unaware that the disc is now defunct. Many who, wrongly, believe that a disc on the windscreen still indicates transferable tax have been caught out when enforcers have caught up with them.

The AA has various case studies where the car was transferred from one member of the family to another but the family were shocked to find that the vehicle excise duty (VED) was not refunded for that month and yet the new owner had to purchase VED for the full month.

Hence the family were paying tax twice for the same month on what has become a 'doppelganger’ vehicle..

Lack of awareness

Less than two months before the abolition, 42% of a sample of 18,000 AA members knew nothing about it. More than half (51%) didn’t know that unexpired tax can’t be passed on and 60% didn’t know about automatic cancellation of the tax disc. The AA had argued that the government should change the refund arrangements so that drivers didn’t lose out.

This has contributed to a 71% increase in the number of cars clamped for being untaxed, up from 5,115 in February last year to 8,741 this February. In March, clampings were still running above 8,000 a month.

“October’s abolition of the vehicle tax disc and a new process for transferring a vehicle’s 'keeper’ is a massive change after 90 years of the old and familiar system. We are particularly disappointed that there was not an equally massive communications campaign to ensure the UK’s 35 million drivers got the message,” says Edmund King, the AA’s president.

"AA members have contacted us expressing outrage that their apparently taxed car was not taxed despite it having a valid disc on display. The DVLA must adopt a cautious and more flexible approach to enforcement during this transition. An AA-Populus poll, carried out just before the new rules started, showed millions of drivers were unaware that a tax disc is automatically cancelled when it changes hands”.


Author: ADMIN
Categories: Blog

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