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Embarrassment for DVLA as agency is forced to offer refunds after £1m trade plate blunder

  • Over 58,000 trade plate holders have been overcharged
  • Mistake only came to light ‘in recent weeks’, says DVLA
  • Refunds estimated to cost over £1.1m

Time 8:35 am, November 15, 2023

A massive administrative failure has led to over 58,000 trade plate holders being overcharged up to £20 in duty after a Treasury error in relation to the cost of a 12-month trade licence.

Licence holders were overcharged £5 in duty in 2021-2022 and £15 in 2022-2023, leading to the majority of those with trade plates being owed £20 by the DVLA – a blunder that will cost the government agency over £1m in reimbursed revenue.

The department says the mistake only came to light ‘in recent weeks’ and that it has taken ‘immediate and direct action’ to refund those who have been overcharged, including the vast majority of car dealers in the United Kingdom, as well as other trade licence holders such as motor manufacturers, auction houses, repairers and vehicle movement specialists.

In a letter sent out to trade plate holders, the DVLA said: ‘According to our records you held a trade licence between April 2021 and March 2023. Unfortunately, there was an issue with the rate of Vehicle Excise Duty (VED)… that was applied during this period. This means that you overpaid for trade licences during this period.’

The refunds apply to over 58,000 trade licence holders who hold licences for cars – but the refunds don’t apply to motorcycles or other types of vehicles, where the DVLA says the correct rate of duty was charged.

In total, the reimbursements are expected to come to more than £1.1m.

The agency has begun refunding customers via payable order or cheque, but in a further administrative bungle it admits it has issued the wrong amount in refunds to some customers, including many who hold multiple trade licences such as movement companies and larger dealer groups.

It is now frantically assessing the situation to ensure that the customers who are entitled to a refund receive one.

Letters have been sent to trade plate holders who have been overpaying

A DVLA spokesman said: ‘We recently identified an issue with the rate of vehicle excise duty that was applied to trade licences between April 2021 to March 2023.  This resulted in a small overpayment, which we reimbursed to those affected.

‘Unfortunately, due to an error when issuing the refunds, some customers have received the incorrect amount. We are in the process of writing to those affected with the correct reimbursement and we apologise for any inconvenience caused.’

However, the DVLA has said it doesn’t want people who think they may have overpaid to contact it directly.

‘We definitely don’t want people to delay cashing their cheque or worry about contacting us, as the majority already have the correct amount of refund – they just need to carry on as normal,’ added the spokesman.

‘We’re in the process of writing to all those who have had the incorrect reimbursement to make sure they get the correct amount as soon as possible, so the message to those is very much the case of if you think you have had the incorrect amount of refund from DVLA for your trade licence, don’t call them as they will be in touch with you direct.’

Refunds will be issued to trade licence holders this month and in December.

Craig Cheetham's avatar

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