DVLA Collected £113 Million in Fines as Car Tax Income Rose 8 Percent

An automatic number plate recognition camera and a decoy surveillance camera on a pole
An automatic number plate recognition camera and a decoy surveillance camera on a pole (image courtesy Deposit Photos)
An automatic number plate recognition camera and a decoy surveillance camera on a pole
An automatic number plate recognition camera and a decoy surveillance camera on a pole (image courtesy Deposit Photos)
  • The National Audit Office reports that DVLA collected £113 million in fines and penalties in 2025-26, up from £110 million the year before, in its audit of the agency’s vehicle tax accounts.
  • Vehicle Excise Duty income rose 8 percent to £9.0 billion, an increase of £0.7 billion, after zero-emission cars lost their exemption on 1 April 2025.
  • The latest Department for Transport evasion figure, from 2023, found 1.3 percent of vehicles in traffic, almost 500,000, had no vehicle tax paid.

DVLA Now Collects £113 Million in Fines and Penalties Alongside £9 Billion in Car Tax

Every year the Driver and Vehicle Licensing Agency collects Vehicle Excise Duty for the Treasury, and every year the National Audit Office checks the sums. The audit of DVLA’s 2025-26 accounts, published on 14 July 2026, contains two numbers that sit side by side. Car tax income reached £9.0 billion, and the agency also collected £113 million in fines and penalties, compared with £110 million in 2024-25.

The National Audit Office says the rise in tax income of £0.7 billion, or 8 percent, reflects the removal of the exemption for zero-emission vehicles from 1 April 2025, which brought more vehicles into scope. It adds that annual uprating of the rates and growth in the number of licensed vehicles also lifted revenue. DVLA’s own annual report puts the total at more than £9.03 billion.

The fines figure is smaller by a factor of eighty, but it is the one that lands directly on drivers. It covers the penalties the agency raises against keepers who do not tax a vehicle or declare it off the road. A £3 million rise in a year is modest, and the audit does not break the total down by offence, so it cannot be read as a count of individual drivers caught.

What the Audit Office Says Drove the Rise

The largest single change was the end of the electric vehicle exemption. From 1 April 2025, electric cars registered on or after that date pay £10 in the first year and the standard rate after that, which is £200 in 2026-27. Electric cars registered between 1 April 2017 and 31 March 2025 pay the standard rate of £200 as well, according to DVLA’s own guidance. The hybrid discount of £10 a year has also gone.

Those changes put millions of extra vehicles into the tax system, and a bigger system produces more missed renewals. DfT figures published on 23 September 2026 show 42.9 million licensed vehicles in the UK at the end of June, up 1.5 percent in a year, and 2,313,000 of them are zero-emission. Each of those keepers now has a tax renewal date to meet that did not exist before April 2025.

The scale of the agency behind those numbers is large. DVLA’s annual report says it handled more than 100 million individual customer transactions in 2025-26, with more than 85 percent processed through digital channels. It issued 12.3 million driving licences and 18.5 million V5C registration documents, and 9.4 million customers have signed up for a Driver and vehicles account. Tax renewals sit inside that volume alongside every licence, registration and medical decision the agency processes.

Readers who want the wider cost of the new regime can see our earlier piece on what electric drivers will pay under the 3p a mile eVED charge planned for 2028.

How Many Vehicles Are Untaxed

The House of Commons Library published a fresh research briefing on Vehicle Excise Duty on 23 September 2026. It sets out the latest official evasion data, and the news is mixed. The Department for Transport found that in 2023, tax had not been paid on 1.3 percent of vehicles in UK traffic, the equivalent of almost 500,000 vehicles. That was down from 1.9 percent in 2019.

The Library adds a warning: the department changed its method in 2023, so the 2023 figure cannot be compared directly with earlier years. The department has also stopped publishing an estimate of the revenue lost, saying the old method could no longer produce a sufficiently reliable figure. Its last estimate, for 2021, was a potential loss of £119 million over one year, and even that was not conclusive, as some tax is paid late.

Looking back further, the share of vehicles evading the tax trebled in Great Britain from 0.6 percent in 2013 to 1.8 percent in 2021 before the 2023 reading of 1.3 percent. The department linked the long-term trend to the administrative changes made in October 2014.

Why So Many Keepers Miss the Deadline

Until 30 September 2014 a paper tax disc in the windscreen showed when tax ran out. The Coalition Government scrapped it in the 2014 Budget, saying DVLA would rely on its electronic register and number plate cameras. From 1 October 2014 the tax also stopped travelling with the car. When a vehicle changes hands, the seller gets the remaining months refunded by DVLA and the new keeper has to pay straight away.

That rule catches people out. A car bought privately on a Saturday is untaxed by Sunday unless the buyer acts, and nothing on the windscreen gives a reminder. The Department for Transport said in its 2021 release that removing the disc “removed a visual in-vehicle reminder” of the expiry date, so DVLA began sending reminders weeks before renewal. In August 2023 it added digital reminders that avoid the wait for a letter.

DVLA says much of the evasion is not deliberate. Data it has cited shows 55 percent of observed unlicensed vehicles had been unlicensed for two months or less, and it describes those keepers as “mainly inadvertent evaders”. The National Audit Office took a harder line in its audit of the 2017-18 accounts. It said initial non-compliance after 2014 was probably unintentional but that data suggested deliberate evasion rose between 2015 and 2017, and it called the increase a matter of concern.

What It Costs You and What DVLA Can Do

For most keepers the direct cost of a lapse is the penalty on top of the tax itself, and the agency’s enforcement does not stop at a letter. In January 2026 DVLA launched a campaign built around a talking clamp to remind drivers of the consequences of leaving a vehicle untaxed. We covered its postcode-level clamping data earlier this month in our report on DVLA clamps and the 150,000 vehicles caught.

The £113 million collected in 2025-26 is the wider result of that enforcement machine: the letters, the penalties and the clamping. The accounts do not split the total by type, so the figure does not tell a driver how likely a single missed renewal is to end in a fine. It does show that the sums are large enough for the National Audit Office to report them as a line of their own.

Ownership changes remain the most common trigger. Buyers of a used car should tax it online before driving away, and sellers should tell DVLA the same day so the refund of unused months is paid. A car that is not being driven should carry a Statutory Off Road Notification. The DfT notes that vehicles without one are expected to be taxed, and a keeper can re-license a vehicle at any time.

Keepers with older vehicles are the group most likely to rely on paper reminders and post. Signing up for DVLA’s email or text reminder, or a direct debit, removes the risk of an expiry date passing unnoticed. Anyone with a vehicle taxed by direct debit should check the payment is still active after a bank account change.

What the Numbers Do Not Tell You

The audit figure is a total for a full financial year, running from 1 April 2025 to 31 March 2026, and it counts money collected rather than drivers penalised. The evasion rate comes from a 2023 survey of vehicles in traffic and describes a snapshot, not a trend that followed. The department has said it and DVLA are working to renew the methods so a revenue estimate can return in future releases, so a newer evasion figure could follow.

What the official record does establish is that the tax system has grown, the fines line has grown with it, and the rule that ends tax at the point of sale remains the everyday pitfall. A keeper who checks the tax date this week, and who diarises the renewal for any car bought in the last year, avoids becoming part of the £113 million.

Sources

  • National Audit Office, DVLA Accounts 2025-26: https://www.nao.org.uk/reports/dvla-accounts-2025-26/
  • DVLA, Annual report and accounts 2025 to 2026, gov.uk: https://www.gov.uk/government/publications/dvla-annual-report-and-accounts-2025-to-2026
  • House of Commons Library, Vehicle excise duty (VED), research briefing CBP-1482, 23 September 2026: https://researchbriefings.files.parliament.uk/documents/SN01482/SN01482.pdf
  • DVLA, Vehicle tax for electric, zero and low emission vehicles, gov.uk: https://www.gov.uk/guidance/vehicle-tax-for-electric-and-low-emissions-vehicles
  • Department for Transport, Vehicle licensing statistics: April to June 2026, gov.uk: https://www.gov.uk/government/statistics/vehicle-licensing-statistics-april-to-june-2026/vehicle-licensing-statistics-april-to-june-2026

Jarrod

Jarrod Partridge is the founder of Motoring Chronicle and an FIA accredited journalist with over 30 years of experience following motorsport and the global automotive industry. A member of the AIPS International Sports Press Association, Jarrod has covered Formula 1 races and automotive events at venues around the world, bringing first-hand insight to every race report, car review, and industry analysis he writes. His work spans the full breadth of motoring — from the latest EV launches and road car reviews to the cutting edge of motorsport competition.

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