The Government is being urged to stop using cheques to send car tax refunds after the Driver and Vehicle Licensing Agency (DVLA) admitted it did not know how many of the millions it issues each year are being cashed.
If someone sells or gets rid of their vehicle they can get a refund for the remaining months that it is taxed, but this refund is sent via cheque to their registered address.
Data obtained by i via freedom of information request shows around five million of these refunds worth are sent each year. Last year, 4.6m refunds were sent out, worth £382m, an average of £80 per refund.
But the DVLA does not hold data on the total proportion of these cheques that are left uncashed, meaning many drivers may be missing out on getting the money they are owed.
Driving campaigners have called on the Government to offer the refunds electronically instead.
Jack Cousens, head of roads policy for the AA, said: “The use of cheques has declined significantly over recent years, and the DVLA should keep pace with the requests of the driver.
“If people still want to receive a cheque then they should be issued one, however with online banking becoming faster and smoother many would want this as the default option.”
Previous data obtained by i has shown how government departments’ use of cheques is causing many to miss out on refunds they are owed for tax.
Last year, i revealed that more than 500,000 people a year are missing out on reclaiming hundreds of pounds in overpaid income tax, because of HMRC’s insistence on cheque refunds.
Experts called the figures “staggering” and said many would find the system “onerous” because of difficulties many have cashing in cheques, due to a lack of access to bank branches.
The DVLA told i that although it did not have the overall figures, it could see if an individual cheque had been cashed.
A spokesperson for the agency said: “We want to provide the quickest and easiest service we can for our customers so regularly review how it can be improved. This includes how customers are able to make payments and receive refunds.”
The amount charged for taxing a vehicle varies depending on its emissions, price and other factors.
Some people do not have to pay any tax, but others owe over £2,000 per year, and those paying it can do so by debit or credit card, or via direct debit.
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