Motor tax is payable on an annual, half-yearly or quarterly basis. The rates applicable for the half-yearly and quarterly options are 55.5% and 28.25% of the annual charge, respectively. These relativities have remained generally consistent since the 1960s.
The differential takes account of the extra workload for staff in motor tax offices and the National Vehicle and Driver File and the resultant administrative costs and printing costs that arise, including the issuing of renewal notices. Each quarterly renewal of motor tax follows the same administrative procedures as the annual renewal process. Consequently, renewing on a quarterly basis generates four times the workload of an annual renewal for the equivalent period.
The estimated additional annual income from the increased charges for half-yearly and quarterly discs is in the region of €50m. A loss of income from this source would have a negative impact on the total collected via motor tax and would have to be borne elsewhere in the motor tax system or through the taxation system generally.
I have no plans currently to review the basis for paying motor tax on a half-yearly or quarterly basis.