Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what consideration his Department has made to utilise digital technology to allow the DVLA to tax vehicles by the day, rather than the month.

The requirement to pay Vehicle Excise Duty (VED) for complete calendar months is set out in law. VED is issued from the first of each month and refunds are issued for only the full months remaining on a vehicle licence. Licensing and refunding vehicles from a date other than the first of the month would add a large amount of administrative complexity to the vehicle tax system, increasing costs to the taxpayer.

The government has no plans to change how VED payments are administered in this way, but we welcome representations from stakeholders about how the tax system can be improved. The Chancellor makes decisions on tax policy at fiscal events in the context of the public finances.