Hundreds of thousands of drivers are missing their car tax payments due to lack of funds, says RAC

A ‘worrying’ number of drivers have had their vehicle tax Direct Debits cancelled by the DVLA after payments couldn’t be taken due to lack of funds, the RAC has revealed. Figures analysed by the RAC following a Freedom of Information request show that 950,377 drivers had their direct debits cancelled in the financial year 2021-22, representing an increase of nine per cent 2020-21’s figure of 862,529. It’s less than the 1.1m cancelled in 2019-20, however.

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.

At present, a missed payment or unpaid direct debit will see the DVLA contact the vehicle owner to let them know that another direct debit payment will be attempted on a specified date. If this one then fails to go through, the process is cancelled and the owner will be informed that their vehicle is currently not taxed. A lack of action after this would lead to the DVLA taking enforcement action.

RAC head of roads policy Nicholas Lyes said: “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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