Policy: Enforcement

Effective enforcement can be a key factor for capturing the full benefits of vehicle emissions tax. In the UK significant revenue losses have been reported due to evasion and non-compliance sending out a weak regulatory signal. For example, estimates of VED evasion in 2006 was 5% (£217 million), an increase from 3.6% (£147 million) in 2005. Approximately 37% of motorcycles were estimated to be unlicensed in 2006 representing an increase from 30% in 2005 (Bourn, 2007). Increasing evasion rates potentially undermines public confidence in the government’s enforcement regime. Figure 5-3 illustrates evasion rates from 1999 – 2006 fluctuating between 3 – 5% exceeding the target reduction rate of approximately 2.5%.

Figure 5-3. Vehicle Excise Duty evasion rates in the UK, 1999 - 2006

Source: Roadside survey 1999, 2002, 2004, 2005 and 2006 in Bourn, 2007

The UK government is exploring measures to reduce evasion rates including increased wheel clamping efforts, introducing debt collection agents and increasing advertising campaigns. However, the 2006 survey results showed an increase in evasion despite advertising campaigning efforts as a run up to the survey implying a lack of effectiveness in reducing evasion. Nevertheless, approximately £5.4 million was spent in 2006 – 2007. Measures are currently being explored to determine the effectiveness of advertising in reducing evasion (Bourn, 2007).