Stealth Tax – did you see it?

The trick of ‘stealth’ planes is that they don’t get picked up on radar – before you know it bombs are falling and you’ve had no chance to prepare for it. And so with what became known as ‘stealth taxes’ under Gordon Brown, who was famous for announcing tax cuts whilst slipping in tax rises which no-one noticed. Sadly, this trend has not stopped.

Did you notice the increase in the car vehicle tax you’ll be paying? No, not the increase in the actual rates, we know they seem to go up every year anyway but the extra increase slipped in following the scrapping of ‘paper’ car tax discs. Under the existing paper disc system if you sold a car, the new owner could carry on using the paper disc you had on the car but under the new system you can’t.  If you buy a second hand car you must pay for the tax yourself from the first day of the month in which you acquire the car. The seller can reclaim the balance of the tax that they paid but (and here’s the catch) they will only be refunded whole months that are left on the tax. So if you sell a car on 1st of the month you will lose that month’s refund while the person buying the car will also have to pay tax for the whole of that month.

Will it make much difference? It’s been estimated that around 7,000,000 used cars are sold each year. With an average £200 a year car vehicle tax and an average of two weeks tax refund lost (assuming cars are sold evenly throughout each month) then it all adds up to around a staggering £48,000,000 a yearextra tax. A DVLA spokesman did not dispute the figures but instead pointed out that they (the DVLA) don’t keep the money, it all gets passed to the Government. Makes you wonder what other stealth taxes are flying past right now, undetected.

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