Vehicle Excise and Registration Act 1994 section 7A

Supplement payable on vehicle ceasing to be appropriately covered

Section 7A provides for a financial supplement (penalty charge) to be imposed when a vehicle ceases to be properly taxed, declared off-road, or otherwise covered, and the owner fails to regularise the position within a set period.

• A supplement becomes payable when a vehicle loses its appropriate cover — meaning it no longer has a valid vehicle licence, trade licence, nil licence, or SORN declaration — and the situation is not corrected within a prescribed period.
• A vehicle is considered "appropriately covered" if it has a valid vehicle or trade licence, qualifies as an exempt vehicle (with a nil licence where required), or has been properly declared as off the public road (SORN); when a vehicle is transferred to a new owner, the existing vehicle licence is treated as no longer in force.
• The supplement is payable by the person or persons specified in the regulations, and its amount may increase depending on how long it remains unpaid after the relevant notification is issued; it is charged on top of any vehicle excise duty owed and does not stop being payable simply because the vehicle is subsequently re-taxed or re-declared.
• Regulations setting out the details of the supplement scheme require Treasury consent and, where they introduce a new supplement, increase an existing one, bring forward the payment date, or impose liability on a new person, must be approved by both Houses of Parliament.

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