Nearly One Million DVLA Direct Debits Cancelled Amid Cost-of-Living Crisis
Almost one million drivers in the UK (950,377) had their DVLA Direct Debits cancelled in the 2021-22 financial year. This is a 9% jump from 862,529 cancellations in 2020-21. However, it’s still less than the 1.1 million cancellations recorded in 2019-20.
2022 Sees Surge in Payment Failures
Between April and December 2022 alone, nearly three-quarters of a million (721,486) Direct Debits were cancelled. If this rate continues through to April 2023, cancellations could outstrip the 2019-20 total – signalling growing trouble for drivers during the ongoing cost-of-living crunch.
How DVLA Handles Missed Payments
The DVLA contacts drivers after a missed or failed Direct Debit, warning of a further payment attempt on a specified date. If that fails too, the payment mandate is cancelled and the vehicle is marked as untaxed. Without sorting tax payments by other means, drivers face enforcement action – including fines and possible vehicle clamping or crushing.
More Drivers Spreading Payments Amid Rising Bills
- 86% of motorists now pay vehicle tax monthly by Direct Debit.
- Just 10.46% pay annually, and less than 4% go for six-monthly payments.
- Monthly payments have risen 3% in two years, while six-monthly payments have dropped 9%.
This shows more drivers prefer spreading out costs, likely to manage soaring household bills.
Vehicle Tax Rates Vary Widely
Tax depends on CO2 emissions and year of first registration. Expensive vehicles pay an extra duty premium between years two and five. Electric vehicle owners are exempt from road tax until 2025 but still need to ‘tax’ their cars for free.
RAC Warns: Struggling Drivers Must Act
Nicholas Lyes, RAC head of roads policy, said: “Spreading payments helps people budget when paying vehicle tax, so it’s very worrying that some are now struggling to do this. Recent RAC research shows worrying trends of drivers putting off repairs and cutting back on vehicle servicing due to financial pressures, so the rise in cancelled Direct Debits likely reflects wider struggles with car running costs.”
“Two failed Direct Debits from the same account could lead the DVLA to remove that payment method. If payments are a problem, drivers should contact the DVLA immediately, especially if contacted already. Ignoring the issue will lead to an £80 fine and the outstanding tax. And those risking it may face vehicle clamping or crushing.”
“While monthly or six-monthly payments spread out the cost, drivers should know they generally pay more than if they pay annually in one lump sum.”
