The Department for Transport has estimated that 1.6 per cent of the vehicles on UK roads are currently driving without tax.
It equates to 634,000 vehicles currently driving on the UK’s roads without paying Vehicle Excise Duty (VED) – resulting in lost revenue of up to £85 million in 2019/20.
That figure is lower than the one given in 2017 – when it was 1.8 per cent – but higher than the 1.5 per cent estimation made back in 2015.
A survey on Vehicle Excise Duty evasion published today discovered that nine per cent of the unlicensed vehicles were sold new in the last two years.
However, 43 per cent were purchased 10 years or more ago. In addition, 1.7 per cent of private and light goods vehicles were untaxed, compared to 0.5 per cent of buses and 0.8 per cent of heavy goods vehicles.
Simon Williams, RAC spokesman, 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. To put this into perspective, evasion in 2013 was around 0.6% and in 2015, the next point at which this survey was carried out, it had risen to around 1.4%.
“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.”
The Department for Transport suggested that the rise in the evasion of road tax since 2013 could be linked to the eradication of the paper tax disc in 2013. In addition, the new law which meant that road tax automatically ends when a vehicle changes owner could also contribute towards the fall in road tax.