Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, for what reasons the surcharge for paying for road tax either monthly or as two six-month payments was set at five per cent.

In October 2014, the Government reformed Vehicle Excise Duty (VED) to allow motorists to pay by Direct Debit either monthly, six monthly, or annually. To limit the impact on the public finances a five per cent surcharge was introduced on monthly and six monthly direct debit payments. Previously this surcharge was 10%. This surcharge recognises the loss of interest resulting from delayed payments.