Concerns rise as DVLA cancels more drivers’ vehicle tax Direct Debits due to lack of funds

According to the RAC, the DVLA has revoked a “worrying” number of drivers’ vehicle tax Direct Debits after payments were unable to be made because of a lack of funds.

According to data analyzed by the RAC after a Freedom of Information request, 950,377 drivers had their direct debits cancelled in the financial year 2021-23, an increase of 9% from the figure of 862,529 in the prior year. But it’s fewer than the 1.1 million cancellations in 2019–20.

Nicholas Lyes, RAC head of roads policy, said: “If drivers are struggling with payments, they should get in touch with the DVLA, particularly if the agency has already contacted them. Ignoring the problem carries an £80 fine, along back the outstanding tax. And those who don’t do this risk their vehicles being clamped or crushed.”

That said, the RAC finds it ‘concerning’ that between April and December 2022, nearly three-quarters of a million had their direct debits cancelled. If this trajectory continues to April, it could see an even bigger total than 2019-20’s financial year.

Now, the DVLA will contact the car owner in the event of a missed payment or an unpaid direct debit to inform them that another direct debit payment attempt will be made on a specific date. If the next one also fails, the procedure is abandoned, and the owner is notified that their car is not currently being taxed. If nothing is done after this, the DVLA will take enforcement action.

Nicholas Lyes goes on to say: “Spreading payments helps people budget when paying vehicle tax, so it’s very worrying that some are now struggling to do this.

“With recent RAC research revealing a worrying trend of drivers putting off repairs and cutting back on vehicle servicing because of household budget pressures, we are concerned the increase in the number of cancelled DVLA direct debits is part of a bigger picture of people struggling with the running costs of a vehicle.”

Drivers have paid ‘overwhelmingly’ via direct debit this financial year with 86 per cent opting for this method. Just one-in-10 pay annually, with less than four per cent paying every six months.

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