DVLA revenue falls £93m since paper tax disc scrapped

Road tax revenue has fallen by £93m in the year following the abolition of the paper tax disc, Driver and Vehicle Licensing Agency (DVLA) figures show.

Revenue from road tax fell 1.5% to £5.93bn in the year to the end of March 2016, from £6.023bn a year earlier.

Motoring body the RAC said the figure was "a significant sum" that needed "further investigating".

The DVLA said a move to direct debit payment and cleaner cars paying less tax accounted for the change in income.

The fall in tax revenue is larger than the Department for Transport (DfT) forecast when the tax disc was abolished a year ago.

At the time the tax disc was phased out, the DfT estimated a loss to the exchequer of around £80m for 2015.

The RAC said it was concerned that losses would continue to rise in the coming years as a result of increased evasion. It called for a roadside survey of unlicensed cars - a year earlier than one was due to be undertaken.

But a DVLA spokeswoman said: "We have introduced direct debit to help customers spread the cost of paying for their tax disc, and more than 10 million people have taken advantage of this, so there is a lag in when we receive the money.

"In addition, there are more clean cars on the road paying lower tax."