Car owners paying ‘double taxation’ on car tax

According to motoring organisation the AA, motorists are losing out to the tune of almost £40m a year because of the new car disc system, which the AA claims has become a ‘double taxation’ because of the way the new rules work. However, the Driver and Vehicle Licensing Agency (DVLA) has disputed the figure.

The new system, which scrapped the paper tax disc in a bid to save around £7m in printing and postage costs, was introduced in October. Under the old rules, the tax disc could be transferred between owners when a car was sold.

However, under the new system, the buyer must pay the tax as soon as they buy the car. This means that if a person sells a vehicle on the 2nd of the month and the vehicle tax is due to expire at start of the following month, they are not able to get a refund for the rest of the current month, as rebates can only be claimed for a full month. In addition, the person who buys the car on the 2nd of the month must start paying from the 1st, meaning, in effect, that in many cases two people will have paid the full tax on one vehicle for almost a month before the new month starts.

According to the AA, information about the new system is not being communicated well enough to drivers and it is costing them money. Despite the DVLA’s rebuttal, they say that their estimate of £38m is conservative and claim that the confusion may also result in untaxed cars being clamped if they are spotted, which costs drivers even more money. The facts tend to bear this out, as almost 8,500 cars were clamped for not having road tax in the UK in March this year, compared with only just over 5,000 in March 2014.

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