The latest report from the Department from Transport, however, shows that that the number of vehicles evading road tax - also known as VED - has more than tripled since the paper disc was scrapped.
In 2017 an estimated 755,000 vehicles were without Vehicle Excise Duty (VED) - commonly referred to as auto or road tax.
The DfT admits that the increase in untaxed vehicles "could be due to the major changes to the licensing system which took place in October". However, around 1.9% of all vehicles on the road are unlicensed - equating to a total of 755,000.
That's up from 1.4% in 2015, but more significantly, three times the level in 2013, which was the last full year to require the use of paper tax discs displayed on the inside of a car's windscreen.
Nicholas Lyes, RAC public affairs manager, said these figures are extremely concerning as the Treasury expected abolishing the paper tax disc would save £10m, yet it's cost £107m in lost revenue. Vehicles can now be fully taxed online, and despite the rise in untaxed vehicles, the DVLA insists only a minority of drivers forget or choose not to tax their cars.
But despite the government's defence that all vehicle owners are sent renewal reminders, it appears that more motorists are now prepared to try their luck to see if they can get away without paying at all.
Oliver Morley, chief executive of DVLA, said: "More than 98 per cent of all vehicles on the road are correctly taxed".
The latest statistics are based on a roadside survey by the DfT in June 2017, with vehicles being observed at 256 locations around the UK.
A third of untaxed vehicles counted by the DfT were those that had been bought by new owners.
According to commentators, the numbers mean the Treasury could be losing up to 107 million a year in unpaid tax, according to government estimates.
It also says that 12 per cent of drivers without tax have actually declared their auto as SORN (Statutory Off Road Notice) - that's a vast increase compared with just one per cent in 2015.
The removal of the paper tax disc, which was introduced in 1921, has been labelled as a key cause for the increase in untaxed cars.
The number of untaxed cars on Britain's roads has hit a 10-year high, according to official figures.
The switch to this new online auto tax system in October 2014 cost a reported £1m.
Mr Lyes commented: "From 2020, Vehicle Excise Duty receipts will also directly fund improvements to our strategic road network, so it is vital every effort is made to make sure we tackle evasion so our road network does not lose out on essential investment".
Regionally, the West Midlands (2.1%) and North West (2%) showed the highest rates of evasion while the East of England had the lowest rate at 0.8%.
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