Up to a quarter of a million business use vehicles, commonly referred to as ‘grey fleet’, could be evading Vehicle Excise Duty (VED) with a potential financial risk of £18m in fines according to Licence Bureau.

Department for Transport (DfT) statistics for the rate of VED (road tax) evasion among vehicles on the UK’s roads shows 1.6% of vehicles in the active vehicle parc are unlicensed. With an estimated current grey fleet of 14 million, this could amount to some 224,000 vehicles being driven without road tax, daily, for work purposes.

Evading road-tax is not only a legal offence but compromises a company’s duty of care for their employees every time that specific vehicle is driven on company business which can be anything as mundane as dropping off a parcel or collecting refreshments for a meeting.

Every vehicle registered in the UK must be correctly taxed if used or kept on a public road. This tax is collected and enforced by the Driver and Vehicle Licensing Agency (DVLA).

Driving without road tax can result in a DVLA imposed fine of £80, which can be reduced by half if paid in 28 days. This means, at any one time, business use drivers could be facing a combined £18m financial risk of fines.

‘With the potential for 224,000 business use vehicles driving without road tax, culminating in a financial risk profile of £18m in fines, the challenge of keeping on top of vehicle excise duty requirements is significant,’ said Steve Pinchen, sales director, Licence Bureau. 

Steve continued, ‘VED is another key aspect to operating a compliant business fleet and a legal requirement that is the responsibility of individual drivers but must also be proactively managed by businesses, in-line with their duty of care obligations.’

Part of Licence Bureau’s grey fleet service provision offers businesses the reassurance that their grey fleet drivers and vehicles are fully compliant, including ensuring VED is paid and within date.

The VED evasion statistics are based on observing registration marks of vehicles in traffic via a roadside survey carried out at 256 sites across the UK in June 2019.

Failure to pay any VED evasion penalty within the specified timeframe could result in a fine of up to £1,000 or five times the annual road tax fee if the case goes to court.

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