§ Mr. MansTo ask the Secretary of State for Transport whether he has reached a conclusion on the recommendation of the Public Accounts Committee that a charge be considered for payments of vehicle excise duty refunds.
§ Mr. Peter BottomleyThe Government have carefully considered the implications of imposing an administrative charge for refunds of vehicle excise duty, in the light of the recommendation of the Public Accounts Committee in its 50th report, 1985–86, "Vehicle Excise Duty Evasion and Enforcement". A number of factors have to be taken into account. The PAC rightly drew attention to the regular use of the refund facility by motor traders as part of their commercial activities. The facility is available for refunds in other circumstances and by private motorists. It could be argued that it would be unreasonable to demand payment for a refund of duty paid in advance for the use of a vehicle which is then not used for the full period of the licence. A study by the Department of the full financial implications of refunds has shown that the revenue gained by the Exchequer, because duty is not under present arrangements refunded for incomplete months, more than covers the costs of handling refund transactions. Separate handling charges are not at present made for the majority of vehicle licensing transactions, over and above the duty liable.
The Government's conclusion is that it is not necessary to introduce a charge in the context of the existing arrangements. The matter will be kept under review.