Vehicle Tax Query
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But of course you might argue that they are giving you a discount for buying 12 months instead of 2 x 6!0
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Is it credit/penalty, or an incentive to pay in one go, rather than twice?0
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4 Amount of duty.
[F6(1)Where a vehicle licence for a vehicle of any description is taken out for a period of 12 months, vehicle excise duty is to be paid on the licence—
(a)at the annual rate of duty applicable to vehicles of that description, or
(b)if the duty is to be paid by more than one instalment pursuant to an agreement under section 19B, at a rate equal to 105% of that annual rate.
(2)Subject to subsection (2A), where a vehicle licence for a vehicle of any description is taken out for a period of 6 months, vehicle excise duty is to be paid on the licence—
(a)at a rate equal to 55% of the annual rate of duty applicable to vehicles of that description, or
(b)if the duty is to be paid by direct debit pursuant to an agreement under section 19B, at a rate equal to 52.5% of that annual rate.
http://www.legislation.gov.uk/ukpga/1994/22/part/I/crossheading/main-provisions
So yes, they're allowed to charge extra when paying in instalments.You keep using that word. I do not think it means what you think it means - Inigo Montoya, The Princess Bride0 -
The annual reminder arrived today and this got me pondering. Is the DVLA actually permitted to charge credit when paying road fund licence over 6 or 12 months? Is it actually "credit" in the true sense and subject to certain legal requirements?
Maybe the DVLA would argue that the price of the road tax is the higher of the 2 figures and the lower figure is essentially them allowing you the kindness of a "discount" for paying in advance as a lump sum.
Be interesting to hear others views on this. If I am right and its a case of them making money on the higher rate from those who choose to spread the cost they must make a fortune in the extra direct debit charges.
My view is that as the tax runs month to month youre not really paying by credit apart from the 30 odd days ahead of you each month. It might not amount to much money but I would still be interested to know the lie of the land on this. The monthly payment on the reminder is also worded thus "monthly payment of approximately". Should it not state the exact monthly amount?
Apologies if this topic has been covered before.
The simple answer is do what the rest of us do buy 12 months tax0 -
Back in the paper disc days was it not more because of the admin for 2 transactions and 2 discs in a year instead of just 1? These days I can't really see there being more admin work as it's all computerised and no paperwork (discs) being issued.
I don't believe that it's solely because of the cost of a direct debit mandate, as every payment type has a cost. Even paying cash at the PO will cost DVLA in using PO services.
It's like saying it costs a shop in fees if you pay by debit card but doesn't if you pay by cash, but it costs them fees for cash transit service and banking too.0 -
Deleted_User wrote: »Back in the paper disc days was it not more because of the admin for 2 transactions and 2 discs in a year instead of just 1? These days I can't really see there being more admin work as it's all computerised and no paperwork (discs) being issued.
I don't believe that it's solely because of the cost of a direct debit mandate, as every payment type has a cost. Even paying cash at the PO will cost DVLA in using PO services.
It's like saying it costs a shop in fees if you pay by debit card but doesn't if you pay by cash, but it costs them fees for cash transit service and banking too.
'Is it actually "credit" in the true sense and subject to certain legal requirements?'
the answers are 'yes', and 'probably not'. As a government agency the DVLA are probably exempt from the Consumer Credit Act, though I can't be bothered to research it;).0 -
Probably the biggest additional cost is finance. Payment by instalments has a big deleterious impact on cashflow, which has to be made up somehow. So to the original questions:
'Is it actually "credit" in the true sense and subject to certain legal requirements?'
the answers are 'yes', and 'probably not'. As a government agency the DVLA are probably exempt from the Consumer Credit Act, though I can't be bothered to research it;).
Makes no difference to me, my tax is just £30 a year and gets paid off in one go by debit card. I don't think I'll ever get a car in the near future that is more than £30 a year tax. Not until 2017 cars become 10 year old atleast.0
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