Fleet News

'Outrageous' tax hike condemned

ANNUAL fleet costs are set to rocket by millions of pounds following the Driver and Vehicle Licensing Agency's (DVLA) announcement that it will increase the price of the new vehicle registration tax by more than 50%.

The current £25 fee to register a new vehicle is set to soar to £38 and could add almost £20 million a year to costs for fleets, which account for the majority of new vehicle registrations.

The DVLA has brought the registration charge in line with the fee paid for a driver's first driving licence, a move which has been condemned by industry bodies.

The Society of Motor Manufacturers and Traders (SMMT) has attacked the decision, claiming it is a stealth tax to cover the thousands of drivers failing to register their vehicles every year.

Christopher Macgowan, chief executive at the SMMT, said: 'There is simply no justification to increase this fee by up to 52% for buyers of new cars and commercial vehicles.

'The truth is that due to fraud and evasion some 1.75 million cars fail to pay their duty each year and it appears that this is a back-door way of recovering the money.

'In addition to the added cost to consumers, there will also be an extra burden on manufacturers and dealers who will have to change advertising and marketing materials to reflect this surprise new tax.

'At a time when new car prices have fallen by up to 20% and the car market is under considerable pressure, it is outrageous that a tax hike of this kind has been approved.'

The DVLA claims the increase, which will be enforced from January 1, will bring a fairer charging system to UK motorists.

The changes also include scrapping re-licence fees for the over-70s, abolishing the bus and lorry upgrade licence fees and increasing charges for lost or damaged documents.

A spokesman for the DVLA, said: 'Following consultation with our customers, these changes seek to replace the existing fee structure with a simplified, fairer and more equitable system, which will see savings for the vast majority of ordinary motorists.'

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