- Drivers having Direct Debits
cancelled by DVLA increases by nearly 10%
- Increasing numbers switching to
monthly payments to spread tax costs
There has been a worrying increase in the number of drivers
having their vehicle tax Direct Debits cancelled by DVLA after
payments couldn’t be taken due to a lack of funds, figures
analysed by the RAC show following a Freedom of Information
request.
Almost one million drivers (950,377) had their Direct Debits
cancelled in the financial year 2021-22, an increase of 9% on the
862,529 on 2020-21. This is, however, still fewer than the 1.1m
cancelled in 2019-20.
Perhaps even more concerning is that between April and December
2022, nearly three-quarters of a million (721,486) had their
Direct Debits cancelled which, if this trend continues during the
cost-of-living crisis until April 2023, could mean an even bigger
total than the 2019-20 financial year.
Under current procedures, a missed payment, or an unpaid Direct
Debit results in the DVLA contacting the vehicle keeper to inform
them it will attempt a further Direct Debit on a specified date.
If this subsequently fails, the mandate is cancelled and the
owner is advised that the vehicle is not taxed. Failure to tax it
another way will lead to the DVLA taking enforcement action.
So far this financial year, drivers overwhelmingly prefer to pay
their vehicle tax monthly by Direct Debit, with 86% choosing to
use this method. One-in-10 (10.46%) pay annually, with less than
4% paying every six months. The trend towards drivers choosing to
pay their vehicle tax monthly continues to grow – up 3% in the
two years to the end of March 2022, while those paying every six
months has fallen by 9% over the same period. This perhaps
demonstrates that more drivers are looking to spread their
payments throughout the year to cope with big rises in household
bills.
The amount drivers pay in vehicle excise duty varies considerably
depending on the vehicle’s CO2 emissions and the year it was
first registered*. Those vehicles that were sold with a higher
list price may also pay a duty premium between years two and five
following registration, while those driving a pure electric
vehicle are exempt from road tax completely until 2025 – though
must still technically ‘tax’ their car for free.
RAC head of roads policy Nicholas Lyes said: “Spreading payments
helps people budget when paying vehicle tax, so it’s very
worrying that some are now struggling to do this. With recent RAC
research revealing a worrying trend of drivers putting off
repairs and cutting back on vehicle servicingbecause of
household budget pressures, we are concerned the increase in the
number of cancelled DVLA Direct Debits is part of a bigger
picture of people struggling with the running costs of a vehicle.
“It’s important to realise that two consecutive failed Direct
Debits from one bank account could lead to the DVLA removing that
as a payment option.
“If drivers are struggling with payments, they should get in
touch with the DVLA, particularly if the agency has already
contacted them. Ignoring the problem carries an £80 fine, along
back the outstanding tax. And those who don’t do this risk their
vehicles being clamped or crushed.
“While spreading vehicle tax costs can be appealing from a
budgeting point of view, drivers should also be aware they will
end up paying more if they choose monthly or six-monthly payments
than they would if they paid in one go annually.”
Ends
Notes to Editors
*
https://www.gov.uk/vehicle-tax-rate-tables
