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First registration fee rise under attack

A plan to increase the first registration fee for new cars has been attacked by a leading industry figure. The proposal has caught the industry by surprise and, if it goes through, retailers will lose hundreds of pounds changing crucial advertising material.

The Government wants a £13 hike in the fee from £25 to £38 to be implemented at the end of this year, meaning maximum potential revenue from the scheme would increase by £33.3m, from £64.1m to £97.4m, based on the 2.56m vehicles sold during 2002.

The fee was originally introduced to cover a vehicle's administration costs during its life on UK roads. But ministers are said to want to use the extra cash to finance initiatives to combat vehicle crime. Current exemptions, such as vehicles registered in the disabled class, would continue to apply.

A consultation document was published on the Driver and Vehicle Licensing Agency website in May, requesting responses to be submitted by August 18. Proposals for the increase have already been rejected by the Motoring Vehicle Registration Implementation Board, a parliamentary group representing the police, automotive industry and Government.

Now the Society of Motor Manufacturers and Traders has slammed the proposal. Christopher Macgowan, SMMT chief executive, says the increase cannot be justified. “The truth is that due to fraud and evasion about 1.75m cars fail to pay their duty each year and it appears this is a back-door way of recovering the money,” says Macgowan.

He adds that retailers will face an extra burden because they will have to change advertising and marketing materials to reflect the tax rise. A spokeswoman for the DVLA says the move is part of a wider review of the operation's fee structures and is also aimed at improving the accuracy of records.

“A decision on whether or not to implement the proposal will be made by ministers once they have considered all the responses to the consultation document after August 18,” says the DVLA.

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