Car Tax Pay Monthly Surcharge

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I think the real reason is probably historic.

They always used to sting you for an extra 10% paying cash for 6months tax as an incentive to buy 12 months (and then, like a true moneysaver, claim the other 6 months back by sending the disc back, or nowadays declaring SORN on the last day of the month which costs them in admin).

Then they wanted people to sign up for direct debit, be it monthlies or 6 monthly as it helps balance the books with a regular income, so they incentivised it by "only" charging 5% for DD.

Graydog7

My tax runs until the end of October and I think there will be another Budget in that month? So, I'll be doing a SORN on the 30th Sept and renewing for a year on 1st October at the current rate to get ahead of the next price hike.

Herzlos

That makes sense.

Paying by direct debit is fairly safe, in that if the customer has money in their account it'll get paid. There's a risk they don't have money and it'll bounce, so it's higher risk that doing it annually in advance.
Paying manually every 6 months is higher risk than direct debit, because as well as the cash flow risk there's also the risk that they'll forget or be unable to make the payment for some other reason.

Though I would have thought paying manually annually would be higher risk than annual direct debit, but they are the same price. Possibly because that was the standard way to pay.

Of course, we're also expecting this to make sense, which may be a mistake.

daveyjp

Graydog7 said:

My tax runs until the end of October and I think there will be another Budget in that month? So, I'll be doing a SORN on the 30th Sept and renewing for a year on 1st October at the current rate to get ahead of the next price hike.

There won't be an increase in October.  Government budgets work on an annual income and expenditure basis and VED tax changes are from April, following the budget in March.

Car_54

daveyjp said:

Graydog7 said:

My tax runs until the end of October and I think there will be another Budget in that month? So, I'll be doing a SORN on the 30th Sept and renewing for a year on 1st October at the current rate to get ahead of the next price hike.

There won't be an increase in October.  Government budgets work on an annual income and expenditure basis and VED tax changes are from April, following the budget in March.

Yes, and this government are known for never departing from the rules ….

Graydog7

I'll still do it If I sniff a Budget coming in October, better safe than sorry. Better do it again in February too then?