Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of charging a 5% surcharge when paying vehicle tax by direct debit on lower income motorists; and whether she has plans to remove this surcharge.

When Vehicle Excise Duty (VED) is paid monthly or six-monthly, rather than annually, the cost to the exchequer is higher because of lost interest. To reflect this impact on the public finances, the previous government introduced in 2014 an extra charge for monthly and six-monthly VED payments to make up for the lost interest

The Government annually reviews the rates and thresholds of taxes and reliefs to ensure that they are appropriate and reflect the current state of the economy. The Chancellor makes decisions on tax policy at fiscal events in the context of the public finances.