Baroness Randerson – 2016 Parliamentary Question to the Department for Transport

The below Parliamentary question was asked by Baroness Randerson on 2016-10-03.

To ask Her Majesty’s Government what assessment they have made of the reasons for the fall in revenue from Vehicle Excise Duty since October 2014.

Lord Ahmad of Wimbledon

The Driver and Vehicle Licensing Agency (DVLA) annual audited accounts showed that £5.9 billion was collected in vehicle excise duty (VED) during 2015-16. The amount of VED collected varies year on year and this was a reduction of £93 million, a decrease of around 1.5% from the previous year. This figure compares favourably with the Office of Budget Responsibility’s forecast that VED revenue would fall by up to £300 million during 2015-16.

The decrease in revenue for the last financial year is principally attributable to the ever increasing number of fuel-efficient cars on the road which attract a lower rate of duty, as well as a small increase in evasion.

In addition, in the 2015-16 annual accounts, the Comptroller and Auditor General noted that the decline in cash receipts had been significantly influenced by the short term effect of giving motorists the option to spread VED payments over longer periods through the introduction of Direct Debit.