Tax discs were scrapped in October 2014, with the government switching over to an online database where Vehicle Excise Duty could instead be bought online instead of going to a post office.
A report carried out by the DfT though has uncovered abuse of the system as an estimated 634,000 untaxed vehicles on the UK’s roads, equating to a £94m in projected losses in revenue for 2019/2020.
When the government set out their plan to do away with paper tax discs, they projected that the scheme would save the taxpayer £10m per year. Given that the deficit now owed to the treasury purse now stretches to around £60m, it seems fairly clear that switching to the digital system of taxation has been more costly.
RAC spokesman Simon Williams said: “While it is good news that vehicle tax evasion has gone down, it is still significantly higher than it was before the tax disc was abolished in October 2014.
“It’s therefore hard to see that doing away with the tax disc has been good for ensuring as many vehicles as possible are taxed for use on our roads.
“This all means the Government is consistently missing out on very large amounts of tax revenue which from next year will be ringfenced for maintaining major roads in England. This time around the lost revenue figure is potentially as much as £94m.”