Image: Flickr
Image: Flickr

The Driver and Vehicle Licensing Agency, more snappily known as the DVLA, appears to have made £400 million less money thanks to the introduction of electronic tax discs.

According the Financial Times (FT), which used freedom of information rules to compile the evidence, revenues at DVLA are down £412 million from last year to £5.71 billion.

The FT speculated that this is down to the decision to scrap paper tax discs and replace them with electronic discs.

The DVLA denies it, saying that any short fall in revenue was a one-off and due to some drivers electing to pay for their tax disc in installments, and by direct debit.

The FT made no mention of the fact that more of us are driving fuel efficient cars, and the cost of a tax disc for such vehicles is tiny.

But then again, there is another point.

A few years ago, Richard Thaler and Cass Sunstein penned a book called Nudge. If you have not read it, it is a book about how us humans, with all our foibles, can be nudged into changing our behaviour, and often for our own good.

So we were nudged into being safer when we drive by making it compulsory to wear seat belts, we were nudged into remembering our bank card, by changing ATMs to return our cash card before handing us cash, and the UK government’s  own so called ‘nudge unit’ helped increase tax payments, by having hand written Inland Revenue tax bill reminders.

And paper tax discs surely nudged us to pay our car tax, long before anyone had heard of Nudge.

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