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Tax disc axe 'will spark avoidance'

Next month's ending of the need to display a car tax disc could lead to tax evasion costing the economy £167 million a year, according to the RAC.

It said it feared that the number of tax-dodgers could equal the number who try to avoid paying motor insurance.

RAC chief engineer David Bizley said: "We could be looking at around £167 million of lost revenues to the Treasury, far exceeding the £10 million that will be saved by no longer having to print tax discs and post them to vehicle owners."

From October 1, motorists will no longer need to display a tax disc on their vehicle windscreen. They will still need to pay their vehicle excise duty car tax, with records being monitored electronically.

An RAC survey of more than 2,000 drivers showed that 36% were unaware of the scrapping of the paper disc, while 47% did not know when the change was due to take effect.

The poll also showed that 63% feared there would be a rise in the number of untaxed cars on the road, while 44% reckoned the change would actually encourage people to break the law.

From October 1 vehicle tax will no longer be transferred when a vehicle is sold, with buyers of used vehicles having to renew the tax when they make a purchase.

Mr Bizley said: "There is clearly concern among motorists over the issue of enforcement. Most of the changes make sense and will benefit the motorist, but too many motorists are unaware of the detail.

"The big question has to be whether enforcement using only cameras and automatic number plate recognition will be sufficiently effective."

A Driver and Vehicle Licensing Agency spokesman said: "There is absolutely no basis to these figures and it is nonsense to suggest that getting rid of the tax disc will lead to an increase in vehicle tax evasion.

"We have a proven track record in making vehicle tax easy to pay but hard to avoid, with over 99% of all vehicles taxed. Given the systems now in place we take enforcement action direct from our electronic records rather than requiring a tax disc."

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