Government accused of ‘wasting hundreds of thousands of pounds a year’ by sending tax reminders to electric car owners paying ZERO…until 2025
- Letters are estimated to cost £450,000 a year and waste up to five tons of paper
- DVLA claims the cost is 35%-45% lower than this and is a ‘legal requirement’
- From 2025, owners of electric cars will have to pay VED due to new rules announced by the Chancellor last year
The government has been accused of wasting hundreds of thousands of pounds a year sending unnecessary tax reminders to electric car owners who fail to pay excise duty on vehicles.
Each year, the Driver and Vehicle Licensing Agency sends letters to drivers telling them to pay for VED and directs them to its website.
Despite battery electric vehicles being exempt from tax due to their zero-emission status, owners still receive letters informing them that they must log into the government site to file tax on their car.
With more than 690,000 all-electric cars currently on Britain’s roads, it is estimated that the agency spends around £450,000 of taxpayers’ money on ‘unnecessary’ postal messages – a figure the DLVA has ardently disputed.
However, from 2025, new and existing electric car owners will have to receive these letters – that’s because they will be forced to pay VED under new rules announced by the Chancellor last year.
The government is accused of wasting nearly half a million pounds a year sending unnecessary tax reminders to electric car owners who fail to pay excise duty on vehicles
The letters and envelopes used to send car tax reminders to EV owners waste about five tons of paper and, combined, take about 100,000 hours for people to log into the DVLA website, according to a calculation by a British company in the EV industry. industry.
The paper waste is estimated at 200,000 A4 sheets and the time wasted by EV drivers is calculated at 10 minutes per person.
Cost estimate is based on letters sent to 600,000 EV drivers at a rate of 75p, which includes the cost of paper (2p), an envelope (5p) and the use of Royal Mail second class stamps (68 pence).
However, when This is Money contacted the DVLA, it strongly disputed this figure.
A spokesperson stated that the agency had made its own calculation of the cost of sending these letters, which we believe is about 35 to 45 percent lower.
Even with this cut, it suggests the agency is using £247,500 to £292,500 of taxpayers’ money to send out unnecessary tax notifications.
The letters and envelopes used to send car tax reminders to EV owners waste about five tons of paper and, combined, take about 100,000 hours for people to log into the DVLA website
Graham O’Reilly, co-founder of Buckinghamshire-based EVCables.com, who has tracked the waste associated with tax reminders for EV owners, said their impact on their environment is counterintuitive.
“Financially, it is a misallocation of taxpayers’ money that could be put to better use elsewhere. Not only that, but this process takes a significant amount of time, with people spending a combined 100,000 hours informing the government about their £0 tax compliance.”
Graham adds: ‘The government should scrap the letters for EV owners and remove the requirement for drivers to log into the portal to save time, money and paper.’
A DLVA spokesperson told us: ‘We issue motor vehicle tax notices to all holders as it is a legal requirement to register a vehicle whether or not excise duty is due.
“This regular contact ensures that the information we have in our records is accurate, which helps the police if they need to track down or contact the custodian. It also helps with safety recalls.”
The DVLA could also argue that EV owners should receive VED payment reminders within the next two years anyway.
That is because Chancellor Jeremy Hunt announced in the autumn declaration of 2022 that zero-emission vehicles will no longer have to pay exemption for road tax from 2025.
Mr Hunt said changes to the existing VED system will be needed from April 2025 to make motor vehicle tax ‘fairer’.
Details detailed in the Treasury document confirmed that all EV drivers will be retroactively stung, with existing EV owners forced to pay more than £165 a year in VED – and the majority of new battery car buyers paying annually more than £520 for five years.