Around 10,000 untaxed cars are being clamped or impounded in the UK every month, according to a government agency.
The Driver and Vehicle Licensing Agency (DVLA) released the figure as it launched a new campaign warning drivers to “tax it or lose it”.
All vehicles registered in the UK and used on public roads must be taxed.
DVLA chief executive Oliver Morley said: “This campaign targets those who break the law by not taxing their car.
“While the overwhelming majority of vehicles on the road are licensed correctly, it is only right that we take action against those people who think they can get away with it. The law is clear and so are the consequences – if you don’t tax your car, you risk losing it.”
The DVLA’s annual reports and accounts show that revenue from vehicle excise duty (VED) fell by £147 million from 2014/15 to 2016/17.
Paper tax discs were abolished in October 2014, leading to fears of increased tax evasion.
But the agency claims an increase in cleaner cars is reducing total VED payments.
Mr Morley said: “The fact is it’s never been easier to tax your car. Our online system is available 24 hours a day and with direct debit you can choose to spread the cost over the year. There really is no excuse for skipping vehicle tax.”
The tax cost for a vehicle’s first year is based on official CO2 figures.
A flat annual rate of £140 then applies to all cars except those which are zero emissions.
An extra charge applies to cars with a list price over £40,000.
AA president Edmund King said: “The AA accepts that most car tax dodgers evade deliberately because they think they can get away it. Their vehicles usually haven’t been through the safety check of the MoT test and, as uninsured drivers, they are a menace that has to be removed from the road.”
RAC spokesman Simon Williams said: “It’s good to see the DVLA publicly warning motorists that they will be caught if they don’t tax their vehicles.
“The owners of untaxed and therefore uninsured vehicles are a nuisance to society and the more that can be done to clamp down on these law-breakers the better.”