DVLA raids the Christmas stocking with a 52 per cent tax rise

10 October 2003 #SMMT News

  • Government hikes new car and van tax by 52 per cent from 1 January 2004


  • Motor industry slams ‘rip-off’ rise in registration fee


The government has today announced that from 1 January 2004 new car and van buyers will face a 52 per cent rise in the first registration fee. The current £25 fee was introduced in 1998 to cover the administration costs throughout the life of the vehicle, but the DVLA has now said that it will rise to £38, without any clear reason for the meteoric increase.

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 has been approved.’


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