Tax disc loopholes leaves motorists with hefty fines

16th July 2015

In October of last year the Government scrapped paper tax discs after 93 years in service, in favour of a new digital system. However, rule changes bought into effect at the same time have left thousands of law-abiding motorists with fines of up to £800 and their vehicles being towed away.

Although motorists realise that tax discs are no longer a requirement, the technicality catching motorists out is that vehicle excise duty (road tax) is cancelled automatically when the vehicle changes hands.

A recent study by The Guardian has revealed that vehicle clamping by the DVLA has risen dramatically since the changes were bought into effect, with monthly clampings increasing from 5,000 to more than 8,000. It predicts that 100,000 vehicles are likely to be clamped this year compared with just 60,000 last year.

Although the DVLA has worked hard to inform motor traders and new vehicle owners of the changes, many motorists have found their vehicles towed away after being given a taxed vehicle by a relative of swapping cars with a family member. Those caught have no right of appeal and claim that the DVLA is acting unjustly.

Caught Out

In March this year a couple from Dorset, Christopher and Marianna Webb, returned from holiday to find their Ford Focus had been towed and impounded for non-payment of road tax, despite the vehicle displaying a valid tax disc in the window.

After two days of battling with the DVLA, the couple were forced to pay £822 to get their car back. The saga began when the couple decided to swap their already-taxed vehicles with each other last October. They wrote to the DVLA to inform them of the change in ownership, but failed to realise that the DVLA had cancelled their tax discs.

The couple were sent refunds for the tax that they had paid, however without reading the accompanying letter in its entirety, they didn’t realise that the vehicles were no longer taxed. They said that the first warning they received was after the vehicle had been towed.

“My first attempt to release the car after a £45 minicab fare failed because, although I had my passport, I did not have the registration certificate and a bill with my address on it,” said Mr Webb.

A neighbour in Dorset kindly posted the documents to the couple in London using a next-day delivery service which cost £20. However, Mr Webb was required to hand over a £200 release fee, £462 in storage fees, plus a refundable surety fee of £160 until the tax was paid. He was told that if he had left it a day longer his car would have been sold at auction and that he would have been powerless to recover it.

In his defence Mr Webb said:

“I always pay all my bills on time. We both have valid discs on our windscreens, and genuinely did not understand anything whatever about the new system that came into being.”

“I accept we should have read the one DVLA letter they sent in October more carefully. However, I feel they are very heavy-handed. Why did they not send a reminder letter in November, December, January or February?” Mr Webb received a further letter from the DVLA, which demanded an out-of-court settlement of £165, while Mrs Webb had committed an offence by having no Statutory Off Road Notification for her Skoda.

“It’s a bit much to threaten to dispose of a car in just nine days,” Mr Webb exclaimed. “If we hadn’t told the DVLA of the change and carried on driving each other’s cars none of this would have happened.”

DVLA Errors

The DVLA has also been guilty of errors since the change in the law, as hybrid and other low emission vehicles that are not liable for vehicle excise duty have been towed.

One man had his car clamped after he opted to buy his wife’s Motability scheme vehicle following her death last summer. Despite going to his local post office, completing all necessary forms and paying for a full year’s tax, the DVLA cancelled the payment following an administration error, which resulted in his vehicle being clamped.

Critics of the new scheme have described it as a bureaucratic nightmare, as buyers have to re-tax an already taxed car, before they are able to drive it, with no grace period. There are also claims that it is a money grab by the DVLA, as it receives two payments for the month in which the vehicle’s ownership is transferred. A spokesperson for the DVLA said “We continue to operate a comprehensive package of measures which make vehicle tax easy to pay but hard to avoid. We know that the vast majority of motorists continue to tax their vehicles on time with over 23 million drivers taxing their vehicles since 1 October 2014.”

“The changes have been widely publicised and we write to every vehicle keeper to remind them of the new rules before the vehicle tax expires. We also write to every new vehicle keeper when they buy a used vehicle, to inform them that they must tax the vehicle before they use it.”

Innocently punished

It seems that it is not just those who were unaware of the rules that have been threatened with fines.

Last November, Caroline Hazell purchased a car and used the DVLA’s website to tax it on a monthly direct debit scheme. However, in February she received a fine for £60 for not taxing the vehicle. Mrs Hazell had no paper evidence of the payment, so believing that she may not have made payment, decided to pay the fine.

Worried that she might be going mad, Mrs Hazell eventually consulted a bank statement, which clearly showed that the direct debit had been set up. Confused, she called the DVLA to investigate. The DVLA confirmed that she had taxed the car but that the previous owner had untaxed it, which rendered the payment void.

Pete Hallam had a similar experience, although his car was clamped, due to an unknown problem that prevented the tax from going through. He claims that there was no attempt from the DVLA to remind him – and has since learned that the DVLA is not legally obliged to. “This is shady practice and reminiscent of the car parking wheel clampers a few years ago. It is a money-making scam,” said Mr Hallam.

What are you views on the change in the road tax system? Was it necessary? Is it a long-overdue overhaul of an outdated system, or is it just a money-spinner for the DVLA?

Tell us in the comments section below.

Did you know that Chancellor George Osborne announced a shake-up of the UK vehicle tax system in his recent budget? – Read about it in our recent post: Budget 2015: What it means for motorists

13th July 2015

Budget 2015: What it means for motorists

The Chancellor, George Osborne, presented his seventh Budget to parliament, in which he announced a number of changes that will impact on UK motorists, including a complete overhaul of road tax regulations and a hike in Insurance Premium Tax (IPT).
Read more about the changes...

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