Section 91 Schedule 19: Vehicle Excise and Registration: Other Provisions
Summary
1.This section introduces Schedule 15 which makes amendments to the Vehicle Excise and Registration Act 1994 (VERA) that are required as a consequence of the Driver and Vehicle Licensing Agency’s intention to no longer issue paper based vehicle licences, trade licences or nil licences. These amendments to VERA will be followed by changes to secondary legislation which will remove the requirement for vehicle licences, trade licences and nil licences to be displayed in the vehicles to which they relate.
Details of the Schedule
2.Paragraph (2) amends section 7 of VERA to remove a regulation-making power which may be used to provide for the return of a vehicle licence when the vehicle licence has been damaged, become illegible or is lost or stolen. As a consequence of no longer issuing a paper based vehicle licence, it removes a requirement for a weight to be shown on a vehicle licence in respect of goods vehicles where a licence is issued at a rate of duty applicable to a lower weight than the vehicle’s actual weight.
3.Paragraphs (3), (4), (8) and (10) amend sections 7A, 10, 29 and 31A respectively of VERA so that it will no longer be possible for a vehicle licence to be transferred when there is a change of registered keeper. As a consequence of this, where there is a new registered keeper he/she will be obliged to take out a new vehicle licence when the vehicle to which the vehicle licence relates is transferred to him/her.
4.It is a necessary feature of paperless licences for the vehicle licence to cease to be in force when it is transferred from one registered keeper to another. If it were the case that the vehicle licence did not cease to be in force when transferred then, in the absence of a paper licence confirming the licensed status of the vehicle, the new registered keeper could unknowingly be keeping an unlicensed vehicle.
5.Paragraph (5) repeals section 14(4). This section provided for the issue of a new trade licence where an existing licence has been lost, damaged, etc. Paragraph (5) further amends section 14 so that a holder of a trade licence may request that the Secretary of State may cancel their trade licence at any time.
6.Paragraph (6) amends section 19 so that a person is entitled to a rebate of the duty paid on a licence they have taken out when they notify the Secretary of State their vehicle was stolen, destroyed, a nil licence was obtained, a licence taken out at a reduced rate, notified off road, sold or disposed of, or exported. The amount of the rebate will be calculated by dividing by twelve the amount of duty chargeable on the licence at the time it was taken out, and multiplying that amount by the number of complete months that are unexpired on the licence from the point when a valid notification is received by the Secretary of State. Section 19 is also amended so that where a rebate condition is fulfilled the licence ceases to be in force. Sections 19(8) is amended so where a request is made to cancel a trade licence, the holder of the trade licence is entitled to a rebate of the duty paid on the licence, when the request is received by the Secretary of State.
7.Paragraphs (9), (11) and (12) amend the sections 31, 31B and 31C respectively of VERA as a consequence of the amendments to section 19.
8.Paragraph (13) repeals section 33 of VERA. As there are no longer paper licences it will no longer be necessary to have an offence of failing to display a vehicle licence, trade licence or nil licence on a vehicle which is used or kept on a public road.
9.As a consequence of repealing section 33, section 33A is repealed (paragraph (14)) so that the now-unnecessary 14 day period of grace for not exhibiting a newly issued vehicle licence, trade licence or nil licence is removed.
10.Paragraph (15) repeals section 35 of VERA. This section provided for an offence where a person knowingly failed to comply with section 10(3) of VERA. However, section 10(3) was repealed by Finance Act 2008. Therefore, this section is no longer required.
11.Paragraph (16) amends section 35A of VERA specifying what happens where payment for VED fails and a notice is served which voids the licence. The notice will no longer require the vehicle licence or trade licences to be returned and instead the notice will only require payment of a sum in respect of the amount of VED which should have been paid. The period of time used to calculate the sum due has been amended.
12.Paragraph (17) amends section 36 of VERA setting out how the amount which may be payable where a court order is made under this section is calculated. The period of time used to calculate the sum due in relation to vehicle licences has been amended.
13.Paragraph (18) amends section 44 to remove the offence of forging, fraudulently altering, using, or lending a vehicle licence, trade licence or nil licence or fraudulently allowing a vehicle licence, trade licence or nil licence to be used by another person.
14.Paragraph (22) provides that the amendments made by the Schedule come into force on 1 October 2014.
Background Note
15.Currently, a paper based vehicle licence, trade licence or a nil licence is issued by the Driver and Vehicle Licensing Agency (DVLA) or the Post Office on behalf of the DVLA, following a valid application to license a vehicle. Historically, this has provided a visual aid for demonstrating the payment of VED and helped aid the identification of unlicensed vehicles.
16.The DVLA and police now rely on DVLA’s electronic vehicle register and use tools like Automatic Number Plate Recognition to ensure that vehicles are correctly licensed and that VED has been paid. Largely due to electronic enforcement, motorists are better informed of their responsibility to ensure that their vehicles are continuously licensed. Enforcement from the record has helped to improve compliance with non-payment of VED running at a historical low. Current estimate of VED evasion is 0.6 per cent which implies VED is a tax with which people are very compliant.
17.As the benefits of a paper vehicle licence, trade licences and nil licence have significantly diminished over time, the Government now believes that the requirement to display a paper licence is redundant.
18.Various provisions in VERA were drafted on the basis of there being paper based vehicle licences, trade licences and nil licences so now need to be amended.
19.Currently, a person must make a separate application for a rebate after having notified DVLA that a vehicle was stolen, destroyed, a nil licence was obtained, another licence has been taken out at a reduced rate, notified off road, sold or disposed, or exported. The Government now believes that there is no longer a need for a separate qualifying application for a rebate now that there will be no requirement to return the paper tax disc. The requirement is that registered keepers, who have satisfactorily notified the Secretary of State (DVLA) of the relevant events described above, will be entitled to a rebate of their VED.
20.The requirement to display vehicle licences and nil licences is contained in the Road Vehicles (Registration and Licensing) Regulations 2002. Amendments to the Road Vehicles (Registration and Licensing) Regulations 2002 are intended to be made which will remove the requirement to display vehicle licences, trade licences and nil licences.
