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Vehicle excise duty evasion: 2009

The Department for Transport has published National Statistics on evasion of Vehicle Excise Duty in 2009. The key results are as follows:

Rate of unlicensed vehicles in traffic

• The overall rate of unlicensed vehicles in Great Britain traffic was estimated to be 0.5 per cent in 2009. This represents a drop from an estimated 0.7 per cent in 2008.

• For different vehicle tax classes, evasion rates in Great Britain traffic were estimated to be highest amongst motorcycles at 3.2 per cent. This increased from 2.3 per cent in 2008, though is down from 6.5 per cent in 2007.

• Evasion rates in Great Britain traffic fell between 2008 and 2009 for all tax classes except motorcycles and ‘other’.

• Of the Government Office Regions, the East Midlands had the lowest evasion rate in 2009 at 0.4 per cent, while Scotland had the highest rate at 0.7 per cent.

• ‘In traffic’ evasion rates fell on all road types between 2008 and 2009. The highest rate in 2009 was on minor rural roads (0.7 per cent) and lowest rate was on both urban and rural A roads (0.4 per cent).

• In Northern Ireland, the rate of unlicensed vehicles in traffic was estimated to be 0.8 per cent in 2009, down from 2.6 per cent in 2008.

Rate of unlicensed vehicles in active stock

• The overall rate of unlicensed vehicles in stock in Great Britain was estimated to be 0.7 per cent in 2009, equivalent to approximately 244 thousand vehicles. In 2008, the estimated rate was 1.0 per cent, equivalent to around 330 thousand vehicles.

• This ‘in stock’ estimate is slightly higher than the ’in-traffic’ rate as unlicensed vehicles travel, on average, fewer miles than licensed vehicles and are therefore less likely to be observed on the road.

• As with in traffic evasion, the rate for motorcycles was estimated to be highest for all tax classes at 3.9 per cent, or 49 thousand vehicles.

Revenue lost from unlicensed vehicles

• It is estimated that vehicle excise duty evasion could cost around £34 million in lost revenue in 2009/10, down from an estimated £49 million in 2008/9.

• This loss is equivalent to around 0.6 per cent of the total revenue that could be raised in 2009/10.

• Some of this revenue will be recovered through DVLA enforcement activity or through vehicles’ keepers back-licensing their vehicles.

Characteristics of unlicensed vehicles

• Thirty seven per cent of unlicensed motorcycles and 31 per cent of unlicensed bus were observed whilst declared SORN (Statutory Off Road Notification). The equivalent figure for unlicensed private and light goods vehicles was 10 per cent and 18 per cent for goods vehicles.

• Seven per cent of unlicensed vehicles were seen after the keeper paid the required VED and then claimed a refund.

• Sixteen per cent of all unlicensed vehicles observed in the survey had remained unlicensed for at least a year. Forty seven per cent of motorcyles observed had not been licensed for at least a year, but only 14 per cent of private and light goods vehicles had remained unlicensed for this length of time.

• The most common period of time that observed vehicles had been unlicensed was up to two months. Thirty seven per cent of the unlicensed vehicles observed were up to two months outside of their previous licence period (or first registration); 24 per cent had been unlicensed for between two and four months.

• Seventy four per cent of unlicensed vehicles were over five years old, compared to 45 per cent of all licensed vehicles.

• The owner details were not known for 22 per cent of unlicensed vehicles seen in the survey. Amongst all licensed vehicles, details of ownership are unknown in only 3 per cent of cases.

Notes

1. The survey involved contractors recording registration marks of vehicles at 256 road sites across the United Kingdom. In total, around 1.5 million valid sightings of registration marks were collected. These were then checked against the computer record to determine the levels of traffic observed without a valid licence. Information on average traffic flow was used to weight together the results from the different sites to estimate the proportion of vehicle miles driven by evading vehicles.



2. The pattern of repeat sightings of vehicles in the survey is used to estimate the relative mileage of licensed and unlicensed vehicles. These estimates showed that vehicles that are not correctly licensed travel, on average, fewer miles than properly licensed vehicles. Those estimates in turn are used to estimate evasion amongst all vehicles and the revenue loss.