Half-yearly and quarter-yearly rates of motor tax are set in law at a higher rate than the annual fee to take account of the extra workload for motor tax offices and the resultant higher administrative and printing costs. A quarterly renewal of a motor tax disc is equivalent to processing four annual discs in that the same administrative procedures have to be followed each time. In addition, reminders are issued on each renewal. The additional work created by the quarterly and half-yearly disc system is thus considerable and the higher rates reflect the additional costs arising.
It should be noted, however, that at present the quarterly and half-yearly charges are lower than those permissible under law. The Finance (Excise Duties) (Vehicles) Act 1952 provides that the rate of duty for a quarterly licence must not exceed 30% of the full annual duty applicable and sets no upper limit for a half-yearly disc. The rates of duty currently applicable to quarterly and half-yearly discs are 28.25% and 55.5% of the annual rate respectively.