The Tax Man Cometh

Government proposals to increase the first registration fee for new vehicles have been slammed by the motor industry. The current £25 fee was introduced in 1998 to cover the administration costs throughout the life of the vehicle, but the DVLA is now proposing to raise that to £32 or even £38 by the end of 2003.

In a letter to Transport Minister David Jamieson MP, the Society of Motor Manufacturers and Traders today pointed out that the proposed increase in costs to consumers seemed to be covering the estimated 1.75 million vehicles that remain unlicensed each year.

When the issue was raised at the Modernising Vehicle Registration Implementation Board – a group which represents consumers, the police, the motor industry and government – there was a unanimous rejection of any proposal to increase the current £25 fee.

Christopher Macgowan, SMMT chief executive said, ‘There is simply no justification to increase this fee by up to 52 per cent 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 per cent and the car market is under considerable pressure, it is outrageous that a tax hike of this kind is being planned.’

ENDS