A new online system to stop criminals evading VAT on vehicles imported into the UK has been launched today by HMRC.

The DVLA will be able to check HMRC's new online system to ensure the correct VAT has been paid on vehicles brought into the UK before they are registered for use on British roads.

VAT fraud from vehicles being brought into the UK costs the Treasury around £110m a year.

The new system will not only tackle this fraud, but also simplify the rules for legitimate users, making it easier to notify HMRC and register vehicles brought into the UK from abroad.

Sally Beggs, deputy director for VAT fraud at HMRC, said: 'Criminal gangs abused the old system in the past by bringing vehicles into the UK and registering them with the DVLA without accounting for VAT. That stops today.

'The new online collaborative system means people will get the green light from the DVLA only where their vehicle has been notified to HMRC for VAT purposes. Any attempt to cheat the system will stall.'

The online Notification of Vehicle Arrivals (NOVA) system replaces the manual system, where people dealt with HMRC and the DVLA separately.