Fleet News

Tax rise will cost millions

FLEET costs look set to rocket this year following the increase in the cost of new vehicle registration tax by 52% on January 1.

The Driver and Vehicle Licensing Agency (DVLA) has pooled the First Registration Fee (FRF) with the cost of driver licensing, which increases the amount motorists pay to register a new vehicle.

The price was £25 but following the changes it has risen to £38. Experts predict the £13 increase will cost the fleet industry as much as £18 million.

At the time the proposal was announced, the Society of Motor Manufacturers and Traders (SMMT) said the increase is to cover the millions of vehicles that remain unlicensed every year.

Chief executive Christopher Macgowan 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 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.'

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