National statistics

Vehicle excise duty evasion statistics: 2021

Published 30 November 2021

About this release

This release presents estimates for the rate of Vehicle Excise Duty (VED, or vehicle tax) evasion among vehicles seen on UK roads, the corresponding number of unlicensed vehicles, and the estimated associated potential revenue loss.

These 2021 statistics are based on observing registration marks of vehicles in traffic via a roadside survey carried out at 267 sites across the UK in June and early July 2021. Sites were surveyed both on weekdays and weekends.

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).

This survey covers the whole of the United Kingdom, which is Great Britain (England, Scotland and Wales) and Northern Ireland. However, some detailed results are only available for Great Britain due to sampling constraints.

Statistical significance

Changes described in this release will often state whether the change was ‘statistically significant’.

These estimates are based on a survey of a sample of all traffic, so they are subject to a range of uncertainty, represented in some of the charts by error bars showing a range between upper and lower estimates.

Those in the evasion in traffic section are based on the 95% confidence intervals of the estimates. The 95% confidence interval is the range of values within which the true rate of evasion would fall 95% of the time if it were possible to repeat this survey many times.

Headline figures for 2021

Sample changes

The sample of survey sites was updated for these latest figures, with 19 sites being removed and 30 new sites being added. This was largely to remove sites that did not provide a lot of usable data.

Motorcycle estimates

Estimates for motorcycles are not available in 2021 due to insufficient sample size. Consequently, all analysis presented here for total vehicles excludes motorcycles although the impact is very small on overall compliance rates.

Further details are provided later on in the background information.

The estimated rate of unlicensed vehicles (excluding motorcycles) observed on UK roads was higher in 2021 than when previously surveyed in 2019.

In 2021, there was an estimated:

• 1.9% of vehicles (excluding motorcycles) in UK traffic that were unlicensed, up from 1.6% in 2019 (VED0101)
• 719,000 unlicensed vehicles (excluding motorcycles) in UK active stock, or 1.8% of all vehicles (excluding motorcycles) (VED0201 and VED0202)

In 2021, there was an estimated £119 million of potential revenue loss over 1 year for the UK (around 1.8% of total due), although some of this will have been recovered through DVLA enforcement activity or by vehicle keepers paying arrears of VED at a later date (VED0301).

What we can conclude: The UK estimated rate of vehicles (excluding motorcycles) evading VED in traffic in 2021 was statistically significantly higher than in 2019.

What we cannot conclude: The real loss of VED to the Exchequer is not £119 million as this is an upper estimate and some will be reclaimed or paid later.

Measures in this release

This release provides statistics on very similar percentage measures, evasion in traffic, evasion in active stock, and potential VED loss as a proportion of total VED due. These measures are also provided for both Great Britain and United Kingdom, which have similar traffic profiles. Caution should be taken to ensure the correct figure is being interpreted. These similar figures are summarised below in (Table 1).

Table 1: Summary of headline figures for VED evasion in 2021 (VED)

Measure (excluding motorcycles)	Great Britain	United Kingdom
Evasion in traffic	1.8%	1.9%
Evasion in active stock	1.8%	1.8%
Potential VED loss as proportion of total VED due	1.8%	1.8%

Impact of the coronavirus (COVID-19)

These are the first estimates of VED evasion since the beginning of the coronavirus pandemic in early 2020.

There were a variety of possible contributors to the latest trends. These include the:

• impact of the pandemic, including the decision to limit enforcement activity at the height of the pandemic, with Ministerial agreement.
• recent economic recession affecting keepers’ ability to afford VED
• observed increase in vehicles being given a SORN near the beginning of the pandemic and their return to the road in early 2021

At the time of the survey (June and early July 2021), traffic levels in the UK were still a few percentage points below pre-pandemic levels but had begun to recover as coronavirus restrictions were eased.

VED evasion in traffic

Evasion ‘in traffic’

This is the rate of unlicensed vehicles in traffic. In other words, if you stood beside an average road, the percentage of passing vehicles which you would expect to be unlicensed.

This can be thought of as a measure of how much the roads get used by drivers whose vehicles are not compliant with the vehicle tax rules.

The latest estimates indicate that 1.9% of vehicles (excluding motorcycles) in traffic in the United Kingdom were unlicensed for 2021.

This is a statistically significant increase compared with 2019, when the rate was 1.6%. The long-term trends (Figure 1) were likely to be related to the major changes to the vehicle licensing system which took place in October 2014 (see the background information for further details).

Figure 1: Estimated VED evasion rate in traffic, Great Britain from 2007 to 2021 and United Kingdom from 2015 to 2021 (VED0101)

Tax class

Vehicles can be licensed under various different tax classes, depending on the vehicle and keeper characteristics. The DVLA provides general guidance on the main tax classes. The typical vehicles found in the tax class categories used in this release are as follows.

Private and light goods (PLG) - most cars and vans

Goods - most heavy goods vehicles (HGVs)

Motorcycles - most motorcycles

Buses - most buses and coaches

Exempt - various exemptions exist, such as disability, electric, and historic vehicles

Other - catch-all category for all remaining tax classes, such as special vehicles, recovery vehicles, and tricycles

The majority of vehicles are in the PLG tax class, accounting for 89% of all licensed UK vehicles. The UK evasion rate in traffic for PLG vehicles was 1.9% in 2021.

Rates of evasion in UK traffic were relatively low for both the goods (0.8%) and bus (0.4%) tax classes in 2021.

The UK evasion rate for exempt vehicles was 1.3%. Although exempt vehicles do not have to pay VED, they are still required to be licensed for use on the road.

Although there is no 2021 estimate for motorcycles, historically the evasion rate for motorcycles has been higher than for other tax classes, however motorcycles only account for around 1% of traffic on the road.

Region and country

The estimated VED evasion rates in traffic varied across English regions, between 1.5% in the South East and 2.1% in the North East, as shown in (Figure 2), with observed evasion rates of 1.8% in Wales and 2.1% in Scotland. Northern Ireland had the highest rate of evasion in traffic with 2.7%, which was statistically significantly higher than any other region.

Compared to 2019, the largest increases were observed in the North East (+0.5 percentage points), with Yorkshire and the Humber and East Midlands both having increases of 0.4 percentage points. The only region where a lower rate was observed was in the South East, which fell by 0.1 percentage points.

It should be noted that these results are based on where vehicles were seen in traffic, not where they are registered.

Figure 2: Estimated VED evasion rate in traffic by region, United Kingdom, 2021 (VED0103)

Road class

Estimated VED evasion rates in Great Britain were 1.8% across the 3 main road classes, motorways, A roads, and minor roads (Figure 3).

Figure 3: Estimated VED evasion rate in traffic by road class, Great Britain, 2021 (VED0104)

VED evasion in active stock

Evasion ‘in active stock’

This is the number of distinct vehicles which are unlicensed as a proportion of all the distinct vehicles seen on the road. Active stock refers to all vehicles that use UK roads at any time.

This rate can be lower than the evasion in traffic rate if unlicensed vehicles are used more in traffic than licensed vehicles, or higher if they are used less in traffic. The relative mileage is estimated using repeated observations of individual vehicles. For more information, see the notes and definitions.

Evasion in active stock is relevant when calculating potential VED revenue lost to evasion.

The latest estimates indicate that 1.8% of vehicles (excluding motorcycles) in active stock were unlicensed in the United Kingdom, compared to 1.6% in 2019 (Figure 4). Whilst the rate has increased by 0.2 percentage points, the sampling error associated with these estimates means that the change is not statistically significant. (VED0201)

The rate for 2021 corresponds to 719,000 vehicles (excluding motorcycles), compared to 634,000 in 2019. Whilst the number has increased, the sampling error associated with these estimates means that the change is not statistically significant. (VED0202)

Figure 4: Estimated VED evasion rate in active stock, Great Britain from 2007 to 2021 and United Kingdom from 2015 to 2021 (VED0201)

Potential revenue loss to evasion

The estimates in this section relate to potential lost tax revenue over a full year. However, some of this will have been recovered through DVLA enforcement activity or through vehicle keepers paying arrears of VED to cover the untaxed period.

The estimated rate of VED evasion in the UK for vehicles (excluding motorcycles) would correspond to up to £119 million in potential lost tax revenue over a full year. The total figure equates to around 1.8% of the total VED due on all vehicles (excluding motorcycles) (VED0301).

The amount of VED due varies between tax classes, so the potential revenue loss from unlicensed vehicles has a different distribution to the number of those unlicensed vehicles.

The vast majority of the estimated potential revenue lost in the UK, £116 million, was attributable to PLG vehicles, with £1.4 million to goods vehicles, £0.3 million to buses, and £0.7 million to other tax classes (Figure 5). Exempt vehicles do not account for any lost revenue.

Figure 5: Estimated potential VED revenue loss by tax class, United Kingdom, 2021 (VED0301)

Further characteristics of unlicensed vehicles

The results in this section come from matching vehicles to their corresponding records in the department’s vehicle licensing statistics database.

The proportion of observations with a successful match is noted in each subheading. Not every record will match as some observed registration plates are not valid or registered with DVLA properly.

These characteristics (Figure 6) indicate that vehicles are often unlicensed for a relatively short period and often related to the change of keepership of vehicles. This means that revenue will ultimately be recovered once reminders and enforcement actions take place.

Figure 6: Summary infographic of the characteristics of the observed unlicensed vehicles (excluding motorcycles), United Kingdom, 2021 (VED04)

Last licensing activity (based on 69% of observations)

The last licensing activity (VED0401) out of all observed unlicensed vehicles (excluding motorcycles) (Figure 7) was:

• 73% were seen after the licence had expired
• 17% were seen after a licence refund had been issued and a subsequent licence has not been taken out
• 9% were driving while the vehicle previously had a Statutory Off Road Notification (SORN), 6% had a current SORN and 3% had an expired SORN
• 2% had no record of a previous licence

Figure 7: Last licensing activity: unlicensed vehicles (excluding motorcycles), United Kingdom, 2021 (VED0401)

Time since last licensed (based on 67% of observations)

The majority, 55%, of observed unlicensed vehicles (excluding motorcycles) had been unlicensed for less than 2 months prior to the beginning of June, and 13% had been unlicensed for over 12 months, as shown in (Figure 8). The distribution is very similar to the previous survey in 2019, although the over 12 months category has increased from 11% to 13% (VED0402).

Figure 8: Time since last licensed: unlicensed vehicles (excluding motorcycles), United Kingdom, 2021 (VED0402)

Age of vehicle (based on 94% of observations)

The distribution of the age of vehicles (excluding motorcycles) observed in the survey is shown in (Figure 9). Unlicensed vehicles (excluding motorcycles) observed in the survey included a higher proportion of older vehicles, with 38% being 10 or more years old, compared with only 24% of licensed vehicles (excluding motorcycles). Conversely, only 9% of unlicensed vehicles (excluding motorcycles) were under 2 years old, compared with 16% of licensed vehicles (excluding motorcycles). (VED0403)

Figure 9: Age of vehicle: unlicensed and licensed vehicles (excluding motorcycles), United Kingdom, 2021 (VED0403)

Changed hands recently (based on 93% of observations)

35% of unlicensed vehicles had changed hands since the beginning of October 2020, which was higher than the proportion amongst licensed vehicles (21%). (VED0405)

Background information

About these figures

Every vehicle registered in the United Kingdom must be taxed if used or kept on a public road. If the vehicle is kept off-road it must either be taxed or have a SORN (Statutory Off Road Notification) in force. Some vehicle types are zero-rated for VED, for example vehicles used by disabled people, mobility scooters, historic vehicles, electric vehicles, mowing machines, steam vehicles and agricultural vehicles. These are shown in the ‘exempt’ tax class in this report.

VED is collected and enforced by the Driver and Vehicle Licensing Agency (DVLA). The agency carries out computerised and roadside checks to identify evading vehicles. These enforcement activities are independent from this statistical survey of evasion.

Survey design and methodology

These statistics are based on the direct collection of registration plates of vehicles in traffic via a roadside survey using automatic number plate recognition (ANPR) cameras at 267 sites in June and early July 2021. For further details of how the survey was carried out, how the evasion estimates were derived, and treatment of misread registration plates, see the notes and definitions.

Motorcycle data collection in 2021

With only a limited number of motorcycle captures completed across the 2021 survey, the threshold was not met for reliable estimates of this tax class.

In the 2021 survey, there were unexpected failures in the data collection equipment relating to motorcycle-specific number plates. This resulted in an extremely low number of motorcycle plates being collected and this only became apparent after the field work was completed. This means that no separate estimates for motorcycle evasion rates are available for 2021, and overall evasion rates for all vehicles exclude motorcycles.

These issues were the responsibility of the contractor and outside the scope of operational planning agreed with the Department for Transport (DfT). DfT is confident that no other tax classes were affected and that the proportions of sampled plates were in line with expectations.

Whilst motorcycles have been observed to have a higher rate of evasion in previous surveys, they only account for approximately 1% of road traffic. It can be observed from past surveys that their exclusion leads to minimal impact on the overall evasion rate for all vehicles, reducing total VED evasion rates by around 0.01 percentage points.

Changes in handling of low observation numbers for particular tax classes at survey sites

For the production of the 2019 estimates onwards, a correction to the methodology was made relating to sites at which motorcycle evasion was not measured specifically and also an adjustment for all vehicle types as to how data from sites with low numbers of observations for particular tax classes was used.

For motorcycles prior to 2017, even at sites for which motorcycles were not monitored, the overall motorcycle traffic expected at the site was still used in the calculation of overall evasion rates. This had the effect of decreasing motorcycle evasion rates for those years by roughly 1 percentage point. The method has now been changed to only consider sites for which motorcycles were actively monitored.

In addition, further analysis has shown that for sites with low numbers of vehicle observations in particular tax classes, there can be a significant impact of relatively few observations causing the calculated overall evasion rates to be quite volatile. As a consequence, for the 2019 analysis onwards, it has been decided that each survey day at each site would only be included in the analysis if there were at least 10 observations of that tax class.

(Table 2) summarises the impact on the number of observations used for analysis for each tax class. Whilst there was a potential total of 534 surveys conducted, a weekday and a weekend count at each site, 522 surveys were accepted and processed by DfT.

Table 2: Number of surveys used for 2021 estimates with the proportion of validated observations used, United Kingdom

Tax class	Surveys used	Observations used (%)
Private and Light Goods (PLG)	519	100.0%
Goods	290	98.6%
Motorcycles	0	..
Bus	223	90.0%
Exempt	442	99.4%
Other	38	52.6%
Total	519	100.0%

For this reason, it is considered that there is now a discontinuity in the calculated evasion rates estimated for motorcycles between the 2017 and 2019 surveys.

These methodology changes had a negligible impact on overall evasion rate estimates, and there is no discontinuity between years for these estimates or other tax classes.

Users and uses of these statistics

These statistics are produced primarily to provide the Department for Transport, the Motoring Agencies and others with evidence to take an informed view on vehicle tax evasion and related policies. The data also provide a source of evidence for auditing the VED account which is independent of the processes of collecting or enforcing payment.

Strengths and weaknesses of the data

Overall, these statistics are considered to provide good quality estimates of VED evasion in the UK. This is because:

• they are based on a purpose designed statistical survey, using methods that have been carefully developed and peer-reviewed
• they are based on a very large sample of more than 1 million observed vehicles per survey
• the effects of number plate misreads have been considered and additional quality assurance procedures introduced to deal with them
• they avoid many of the statistical biases that would be likely to arise from using data derived from administrative or enforcement systems
• the results are discussed with the DVLA and are thought to be consistent with their operational experience

The limitations include:

• the high cost and practical constraints of data collection mean that only infrequent ‘snapshots’ can be taken
• the number of sites is limited by cost and equipment constraints, which reduces the efficiency of the very large overall sample
• survey work is concentrated in June to maximise the hours of daylight available, but this means no analysis of seasonal variation can be done
• motorcycles are more difficult to survey given their different traffic behaviour and smaller rear-facing number plates. This reduces the reliability of these estimates for motorcycles
• the survey does not identify vehicles that are using ‘cloned’ or ‘fake’ number plates, which might be valid but belong to another vehicle
• the survey does not identify vehicles that are only parked on the public highway but not used in traffic, which would also be a breach of licensing rules

Administrative changes introduced from 1 October 2014

Paper tax disc abolished

The requirement to display a valid tax disc in the windscreen of all vehicles used on the road was abolished on 1 October 2014. This removed a visual in-vehicle reminder of the tax disc expiry date. However, the DVLA sends a vehicle tax renewal reminder 2 to 3 weeks prior to the expiry of vehicle tax. The DVLA also provides an online enquiry service which allows motorists to check a vehicle’s licensing status.

Non transferability of vehicle tax when vehicles change hands, and automatic refunds

Since 1 October 2014, any vehicle tax automatically ends when a vehicle is sold to a new keeper or transferred to the motor trade. The registered keeper automatically receives a refund of vehicle tax for any full months remaining, when the DVLA receives notification of the sale.

Introducing the non-transferability of vehicle tax provides consumer protection by preventing the purchaser of a second-hand vehicle unknowingly using or keeping an untaxed vehicle. Customers now have clarity on the need to always obtain new vehicle tax at the point of purchase. The DVLA issues reminders to all new keepers who have not taxed their vehicle.

Related sources of information

Statistics on the licensed vehicle stock are regularly published by the Department for Transport. The roadside survey data used to produce the VED estimates are also used to produce estimates of foreign vehicles in traffic, which are published as part of the DfT road traffic statistics series.

Next update

This survey is currently carried out in alternate years. Under this schedule, the next survey would be due in June 2023 with the report in late 2023. Any updates to these plans will be advertised via the DfT statistical publications schedule.

Request for feedback

We welcome any feedback on these statistics, to ensure future releases best meet user needs. Feedback can be provided by email to the vehicles statistics team.

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Vehicles statistics

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