An RAC survey of more than 2,000 drivers showed that almost two-thirds of respondents believe changes to the rules on tax discs would prompt more tax evasion.
- 36% were unaware of the scrapping of the paper disc
- 47% did not know when the change was due to take effect
- 63% feared there would be a rise in the number of untaxed cars on the road
- 44% reckoned the change would actually encourage people to break the law
Next month's ending of the need to display a car tax disc could lead to tax evasion costing the economy £167 million a year, according to the RAC.
It said it feared that the number of tax-dodgers could equal the number who try to avoid paying motor insurance.
RAC chief engineer David Bizley said: "We could be looking at around £167 million of lost revenues to the Treasury, far exceeding the £10 million that will be saved by no longer having to print tax discs and post them to vehicle owners."
From October 1, motorists will no longer need to display a tax disc on their vehicle windscreen. They will still need to pay their vehicle excise duty car tax, with records being monitored electronically.
The RAC has urged the government to act as up to 15,000 foreign cars go unregistered every year costing them an estimated £3 million.Read the full story ›
Millions of people face having to hand money back to HMRC after errors meant they ended up paying the wrong amount of tax on their earnings.
It is estimated that 5.5 million people have paid the wrong amount of tax, with 3.5 million thought to have paid too little and the remaining 2 million having overpaid, meaning they can claim a refund.
The mistakes can occur due to a change in personal circumstances, such as if a person moves jobs or starts receiving benefits.
According to tax officials cited by the Daily Telegraph, the average size of the error is about £300.
This is despite the introduction of a new £270 million 'Real Time Payments' scheme designed to make the tax system more accurate by letting people update their information on a weekly or monthly basis.
Mike Down, of accountancy firm Baker Tilly, said the HM Revenue & Customs (HMRC) should be checking tax returns to see whether individuals had already explained their circumstances.
He told the Daily Telegraph that The Revenue is "adopting a computer says yes approach, rather than simply checking the tax returns".
One case involved an elderly widow whose effective tax rate was low because she was giving more than half her income to charity.
The HM Revenue & Customs who have been accused of "bully boy tactics" for sending high earners letters ask why they are not paying more tax, have responded to the claims.
An HMRC spokeswoman said:
We are issuing 1,000 letters to taxpayers with an income of £150,000 or more who have an effective rate of tax of 22% or less.
If a taxpayer is content that their return is accurate then they do not need to do anything.
This is part of a trial to help individuals identify any mistakes they may have made on their Self Assessment return.
Anyone who needs help is welcome to get in touch with us.
The HM Revenue & Customs has been accused of "bully boy tactics" for sending high earners letters asking why they are not paying more tax.
Around 1,000 letters have been issued to people who have an income of more than £150,000 but are paying less than 22% in tax.
The letters state: "We can see from your Self Assessment tax return... that your effective rate of tax is lower than the average for people in your income bracket.
"There may be reasons why your effective rate of tax is correct. But it could mean that there is something wrong with your self assessment."
The Treasury said it was "important that people pay the tax they owe on time" after plans to allow the taxman to seize money from personal bank accounts were criticised by a group of MPs.
A spokesman said: "Although the vast majority do this, there is still a minority that chooses not to pay, despite being able.
"The proposed powers will give HMRC [HM Revenue and Customs] another tool to collect tax debt owed.
"The current consultation includes a range of safeguards to ensure the power is tightly targeted."
The Commons Treasury Select Committee has highlighted the potential for fraud and error if the taxman was given direct access to millions of accounts.
"This policy is highly dependent on HMRC's [HM Revenue and Customs'] ability accurately to determine which taxpayers owe money and what amounts they owe, an ability not always demonstrated in the past," the MPs said.
"Incorrectly collecting money will result in serious detriment to taxpayers," the report continued.
"The Government must consider safeguards, in addition to those set out in the consultation document, to ensure that HMRC cannot act erroneously with impunity.
An influential group of MPs said giving the taxman the power to recover money directly from personal bank accounts without some form of prior independent oversight would be "wholly unacceptable".
The Commons Treasury Committee also dismissed George Osborne's argument that the Department for Work and Pensions (DWP) already had similar powers to collect child maintenance.
The parallel is not exact: in those cases, DWP is acting as an intermediary between two individuals.
HMRC [HM Revenue and Customs] would be acting not as an intermediary between two individuals but rather in pursuit of its own objective of bringing in revenue for the Exchequer.