Since the paper tax disc was scrapped in 2013-14, the number of motorists dodging car tax has tripled.
Data from the Department for Transport reveals the Government potentially lost out on £107 million from 755,000 unlicensed motors last year.
Since converting to the online system, increasing numbers of motorists are evading Vehicle and Excise Duty, with 83,000 failing to tax their car for more than a year.
The last data was collated about tax evasion in 2015, with an increase in motorists avoiding car tax up from 1.4 per cent to 1.8 per cent this year.
The car tax disc was first introduced in 1921 and was abolished in October 2014, in favour an online system. But, despite tax renewal reminders and the option to pay by direct debit, UK motorists are still trying their luck to see if they can get away without paying.
More than 50 per cent of untaxed vehicles had been unlicensed for up to two months, while 11 per cent, around 83,000 vehicles, had been untaxed for more than a year.
Another issue raised by the data is the confusion around taxing a vehicle when it changes hands.
The Department for Transport counted a third of untaxed vehicles were those that had been bought by new owners.
With the tax disc literally going out of the window in 2014, many motorists buying used cars could be unaware that vehicle tax no longer carries over to the new owner and that they are obliged to pay.
With vehicle tax now being non-transferable when a vehicle swaps hands, the original keeper has to claim back the remaining unused tax, but only from the beginning of a new month. However, the new owner must make sure they have paid their newly-purchased car’s tax, before driving off.
This is resulting in cars being taxed by two people for up to a month, which is estimated to earn £40 million a year for the Government.
The highest levels of car tax evasion were in the West Midlands and the North West of England, 2.1 per cent and 2 per cent.
The lowest rate was 0.8 per cent for the East of England and all other areas varied between 1.6 per cent and 1.8 per cent.
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