Wednesday, July 6

Tax disc loophole leaves angry drivers facing massive fines



Thousands of law-abiding motorists are having their cars towed away and having being charged fines of as much as £800 after unwittingly falling foul of car tax rule changes introduced by the DVLA. Figures obtained by Guardian Money reveal that DVLA clampings have risen dramatically since October, when the agency did away with paper vehicle excise duty discs.

Before the changes DVLA was clamping about 5,000 vehicles a month, but this has surged to more than 8,000 – with motorists horrified to discover their cars being towed away without even a warning letter from the agency. In total, more than 100,000 vehicles are likely to be clamped this year compared with 60,000 the year before.

While most motorists know that tax discs are no longer required, what is catching out many is that vehicle excise duty is automatically cancelled if a car changes ownership – even if there is a valid disc in the window.

Previously, anyone selling a used car could post adverts saying “Taxed and MOTd” until a certain date. But now when a car is sold the tax, even if it has many months to run, automatically expires and the new owner has to tax it again. It is this change that is exposing drivers to clamping by the DVLA and large fines.

The DVLA says it has worked with motor traders and written to new owners to make them aware of the change, but plenty of motorists have found their vehicles clamped or towed away after being given a taxed car by a relative, or even swapping cars within a family. Those who are caught out have no right of appeal to an independent body and say that the DVLA is acting unfairly.

If we hadn’t told the DVLA of the change and carried on driving each other’s cars, none of this would have happened

Christopher Webb

Last month married couple Christopher and Marianna Webb returned from a trekking holiday in Nepal to find that the ageing Ford Focus they had left in the Battersea area of London had been towed and stored in a pound for non-payment of car tax. This was despite it having a valid tax disc in the window. Only after a two-day battle, which saw the couple from Bridport, Dorset, hand over £822 to the DVLA, did they get the car back.

Another Money reader, Angus Walker, had to pay £465 to get his hybrid car back from the pound after it was towed by the DVLA, even though the car is not liable for vehicle excise duty due to its super-low emissions. Money has been contacted by several innocent motorists who have had to pay hundreds of pounds in towing and impounding fees; all say they knew nothing of the rule change.

Administrative errors by the DVLA since the rule change have also left motorists fuming. One driver had his car clamped after he opted to buy his wife’s Motability scheme vehicle following her death last August. He went to his local post office, completed the forms and paid for a year’s tax. He even got a receipt confirming this payment, but the DVLA then cancelled the payment following an admin error, resulting in his vehicle being clamping.

The Webbs’ saga started last October and only came about because they decided to swap their already-taxed cars with one another. They diligently wrote to the DVLA to tell it about the changes of ownership. But unbeknown to them, the DVLA had cancelled their tax discs when they swapped, as per its new rules. The couple were sent refunds of the tax they had paid, but admit they failed to read the letter in its entirety, assuming all was well. They say they received no warning letters from the DVLA telling them their cars were not taxed. One eventually did arrive, but only after a car 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,” Webb says.

He was spared a round trip to Dorset after a neighbour sent his documents to London by £20 special next-day delivery. He had to hand over a release fee of £200, storage fees of £462 and a surety fee of £160, refundable when the car tax was paid. He was told that had he left it just a day longer his car would have been sold at auction, with no comeback.

“I always pay all my bills on time,” Webb says. “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?

We continue to operate a comprehensive package of measures which make vehicle tax easy to pay but hard to avoid


“I’ve also got a further letter from the DVLA demanding an additional out-of-court settlement of £165, and my wife has committed an offence by having no Statutory Off Road Notification, even though her Skoda is parked in the yard. It’s a bit much to threaten to dispose of a car in just nine days. If we hadn’t told the DVLA of the change and carried on driving each other’s cars none of this would have happened.”

Last month, a Money reader from London found that the car he had been given by a relative who was emigrating was clamped and he had to pay £650 in fines and charges to the DVLA. He was staggered at the bill, because there was a valid disc in the window.

Critics have described the new rules as a bureaucratic nightmare. Buyers, in effect, have to retax a taxed car before they can drive it, with no period of grace. There are also claims it is a substantial money-spinner for the DVLA as it receives two payments for any month in which a car’s ownership is transferred.

A DVLA spokesman says: “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.” He said in future recent buyers would also get a letter warning them their car is untaxed.

This is shady practice and reminiscent of the car parking wheel clampers a few years ago. It is a money-making scam.

Pete Hallam

Driven to distraction

It’s not just those who were unaware of the new rules who have been threatened with fines – it’s a similar story for those who thought they had done the right thing. Money reader Caroline Hazell bought a car last November and used the DVLA website to tax it, setting up the newly introduced monthly direct debit payment.

However, in February she was fined £60 for not taxing the vehicle. The letter stated that unless she had paper evidence of payment the fine would be valid. Having done it online she had nothing – and, of course, no tax disc. Hazell paid the fine and retaxed the car thinking she was going mad. When her online banking showed she had set it all up she called the DVLA. It confirmed she had taxed the vehicle, but that the previous owner had untaxed it rendering her payment void.

Pete Hallam had a similar experience. “My car was clamped. We thought we had taxed it but there was a problem which we were unaware of, so the tax did not go through. The lack of disc did not alert us to the problem. There was no attempt to remind us with a letter or a call – the DVLA is not legally obliged – just a man in a van clamping the car. This is shady practice and reminiscent of the car parking wheel clampers a few years ago. It is a money-making scam.”

Nicholas Anderson contacted us after being charged money just to drive a new car on the road for an hour. He bought a used car and taxed it, but it broke down within an hour so he took it back to the dealer and abandoned the sale. He applied for a refund, but six weeks later was told that because his name wasn’t on the registration certificate it wouldn’t do it unless he paid the DVLA £25 to have his name added to the certificate, and then immediately removed.

“I am of the view that the new vehicle tax system is a just a massive money-making scheme, deliberately designed to be as bureaucratic and difficult to navigate as possible,” he says. The DVLA has now agreed refunded Hazell’s fine and is to apologise to her.