Motorists 'conned' over tax discs

Some motorists feel shortchanged by the government

By BBC News Online's consumer affairs reporter Sarah Toyne

Up to three million motorists will have paid more for their car tax this year than people with similar cars, because of confusion surrounding 'backdated' payments.

Chancellor of the Exchequer Gordon Brown announced a new tax rate of £105 for cars between 1201 cc and 1549cc inclusive in the November 2000 pre-budget report.

They brought this out to stop fuel protests but have pulled a fast one on motorists. It is very much a sharp practice and unfair. We are being swindled

Andrew Stevens, motorist

The announcement was welcomed by motorists, at a time when the country was gripped with fuel protests and consumers were angry at the cost of fuel.

Car owners were promised 'backdated' payments to November 2000 - but the Chancellor failed to mention that motorists needed to take out a new tax disc to qualify for the backpayments.

This potentially misled millions of motorists who thought they would automatically qualify.

The Automobile Association (AA) says that it has had many letters about the confusion.

Paul Walters, head of road and transport policy said: "We warned the government that if they fiddled around with VEDs there would be problems.

"I was one of those people who thought I would automatically get a rebate until I looked into the details. This is very muddled it should have been a full year rebate to avoid confusion"

Too good to be true

In November 2000, the Chancellor told the House of Commons that he proposed to extend the lower rate licence fee to cars up to 1500cc "from July but to be backdated from today [November ].

"So all those who have a car from 1200 to 1500 cc - an extra 5.4 million cars - will be entitled to £55 off their annual licence fee from today. "

He repeated the pledge in his March 2001 budget.

"This [£55] reduction, to be implemented in July, will be backdated to November last year. In total 9 million cars up to I.5 litres will pay £55 less."

The reality

Many motorists are now starting to receive rebates.

To qualify for the full rebates, motorists needed to take out a new tax disc after 1 November 2000.

Those who took out one between 1 July 2000 and 31 October 2000 did not qualify - even though their one-year tax disc covered the 'backdated' period.

Only people who renewed their tax disc on 1 November can be guaranteed to receive the rebate from that date. For example, if you renewed in March, you would not receive a rebate for the period between 1 November and 1 March.

Chancellor Gordon Brown promised the rebate in the pre-budget report last year

Andrew Stevens from Chelmsford in Essex is one motorist who feels cheated by the government.

He says that if he had known about the details of the scheme, he would have got a refund on his tax disc and renewed it in November to qualify for the £55 reduction.

Mr Stevens said: "They brought this out to stop fuel protests but have pulled a fast one on motorists. It is very much a sharp practice and unfair. We are being swindled."

Even the Driver Vehicle Licensing Authority (DVLA) which is administering the scheme, admitted to BBC News Online that some people could have found the announcement misleading.

A spokesman said: "It is possibly misleading, but it depends on the individual who is interpreting it."

The news has provoked angry responses from accountancy bodies.

Chas Roy-Chowdhury of the Association of Chartered Certified Accounts (ACCA) attacked the government.

He said: "This may rekindle bad feeling against the fuel tax. People rely on what the government says, but the reality is so often different. Perhaps the Chancellor needs to go on a plain English course."

Due a rebate?

The Driver Vehicle Licensing Authority (DVLA) is in the process of writing to drivers who qualify for the 'backdated' payments.

It has so far written to about 2.9m motorists of which just under 2.5m have so far received a rebate - well below the Chancellor's prediction of 5.4m.

All drivers who have cars with engines between 1201 cc and 1549cc inclusive will receive the new £105 rate from 1 July 2001.