How Much Money Is The Government Wasting On Electric Vehicle Road Tax Letters?

How Much Money Is The Government Wasting On Electric Vehicle Road Tax Letters?

If you currently own (or ever have ever owned) a vehicle, you’ll know that one of your responsibilities as a vehicle owner is ensuring you’ve paid your road tax. This can be either by direct debit or an annual payment. If you pay your road tax through an annual payment rather than direct debit, you’ll receive a road tax reminder letter every year telling you how much to pay and how to register the road tax.

However, not all vehicles are eligible for road tax. People who own electric vehicles (EVs) and as such charge their EV through Type 1, Type 2, Type 3 cables don’t pay road tax as they own zero emissions vehicles. This means they don’t have a direct debit and don’t need to pay an annual tax. However, because they don’t pay a direct debit, they will still receive a yearly road tax reminder letter to pay £0. Electric vehicle owners then have to log into the portal and ‘pay’ their road tax.

We wondered how much it must be costing the government (aka the taxpayer) for these pointless letters to be sent out to electric vehicle owners. So we did our research and collected the data so you can see for yourselves.

How Much Money Is Being Wasted?

We worked out that as of September 2022, the government wastes £450,000 every year on road tax letters for EV owners. This number is based on a piece of paper costing an average of 2p, an envelope costing an average of 5p, and a 2nd class stamp costing an average of 68p. This adds up to the price of sending out a single road tax letter as 75p. 

In the UK there are 600,000 electric vehicles that are being sent pointless road tax letters (as of September 2022), including electric cars, light load vehicles, and motorbikes. Therefore, although 75p per letter doesn’t sound like much, when you multiply it by 600,000 electric vehicles, the cost quickly adds up. 

As if £450,000 isn’t bad enough, the amount of wasted government money is likely to be much larger than £450,000. This is because the number of people owning electric vehicles will have grown since September 2022 and this number is constantly increasing as more and more people switch to environmentally friendly electric cars.

But that’s not all. The overall cost of sending these EV road tax letters will be even greater as this number is based purely on the cost of the letters and postage. This doesn’t take into account the salary of the staff, the cost of the printer ink, and the cost of powering and maintaining the printers and computers used to prepare the letters, all of which add up to thousands of pounds of extra wasted money.

How Much Paper Is Being Wasted?

Unfortunately, misusing taxpayers money isn’t the only issue. Sending out road tax letters to EV owners is also damaging to the planet. At least 600,000 envelopes and 600,000 sheets of paper are pointlessly being used every year for these letters. That’s around 5 tonnes of paper waste every year. 

The paper and pulp industry is the 3rd largest industry for polluting the air, water and land as well as the paper industry using more water than any other industry to produce 1 tonne of their product. The paper industry also contributes to deforestation which further damages the environment as well as animal habitats. Therefore, the government squandering around 5 tonnes of paper every year is 5 tonnes worth of pollution and environmental damage that could be avoided.

Graham O’Reilly, Co-Founder of commented on the analysis saying “Of course vehicle owners must pay duty to use or keep their vehicle on the road. 

However, it’s concerning that the DVLA spends half a million annually to send more than 600,000 tax reminders to electric vehicle owners, only to inform them that they owe £0 in taxes.

From a sustainability standpoint, sending 5 tons of paper to individuals who are trying to reduce their impact on their environment is counterintuitive.

Financially, it’s a misallocation of taxpayer money which could be better utilised elsewhere. Not only that, but this process also consumes a considerable amount of time, with people collectively spending 100,000 hours to inform the Government about their £0 tax compliance.

It would be best to see the government scrap these letters entirely as well as the requirement for drivers to waste time logging into the portal to essentially do nothing. More generally I’ve always wondered why more of these paper reminders aren’t moved to email or at the very least the driver is given the option to do so, so we can reduce the waste.


How Much Time Is Being Wasted?

So the government is pouring taxpayers money down the drain and recklessly contributing to environmental damage. But what about the amount of time EV owners are losing just because they’ve made a positive change to help reduce their environmental impact?

If it takes an average of 10 minutes for EV owners to log onto the portal and ‘pay’ their road tax, that’s 600,000 people each losing 10 minutes of their time. Overall, this means a total of 100,000 hours is being wasted every year due to the government's absurd request.

Is The Letter Really Needed?

No. Even for vehicle owners who do need to pay road tax, the road tax reminder letters are just that - reminders. The letter itself is not actually needed to pay for road tax. Instead, road tax can be paid by using the reference number on the vehicle log book which all vehicles have. Therefore, these letters are not really needed. But for EV owners who don’t even need to pay any road tax, these letters are just a complete waste.

If the government stopped sending out these road tax letters for EVs, every year they would save over £450,000 of taxpayers money which could be better spent elsewhere, would reduce their impact on the environment by not frittering away tonnes of paper, and would save the public 100,000 hours of wasted time.

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