How the tax disc changes affect you

Published: 30 September 2014
By Chris Haycock

It was the 1st of January back in 1921 that the paper tax disc was first introduced to car owners in the UK. Since these early times, all owners of vehicles were required to display a valid tax disc on the vehicle's windscreen in order to show the authorities that they have paid the Vehicle Excise Duty. Over 1.7 billion discs have been issued to vehicle owners since they were introduced. This is all set to change tomorrow - the 1st of October 2014, with the abolition of the paper tax disc. With the growing use of technology and sophisticated databases, the DVLA proposed last year the end of the paper tax disc as we know it, and that from the 1st October 2014 car owners no longer had to display it on their vehicle. The organisation claim that the changes are required to increase efficiency and to make it easier for vehicle owners to tax their cars. The DVLA also expect that the new system will benefit the public by saving the tax payer an estimated £10m a year. The DVLA will now be using modern technology, including Automatic Number Plate Recognition (ANPR) systems to ensure that vehicle owners are up-to-date with their car tax. Who does this affect? All individuals, organisations and companies that own a vehicle, whether car, van, motorbike, bus or lorry) will be using the new system. So, in other words, anyone with a vehicle. So, apart from not having to display tax discs on our vehicles, how else does it affect us? Firstly, the new system will allow owners to pay for their Vehicle Excise Duty (VED) by direct debit in various ways - via the internet, post, phone or at the Post Office. Instead of having to fork out for six-month or yearly VED, we can now opt to pay monthly, although be aware that the monthly option costs an additional 5 percent, which is still less than the 10 percent extra you've been paying for a six-month tax disc. Road tax price bands will remain the same. If you pay the annual lump sum for your VED, you won't be charged extra, so you'll be better off by stumping up for the full twelve months in advance. The DVLA will send you a reminder by post when your VED is due for renewal. The legal requirements when selling your car will change too. On selling a car you won't be able to transfer the tax over. You'll need to apply to the DVLA for a refund, and the new owner will need to buy their own VED for their newly purchased car. This is an important note to remember, to avoid paying a fine of a thousand pounds for driving untaxed. The downside to this new requirement is that both new and old owner will be paying to tax the vehicle for the same month, which has caused some controversy on social media. Make sure that if you're selling a vehicle that you inform the DVLA immediately that you are now longer the owner, so you can avoid any subsequent speeding or parking fines that happen under the new owner. Once you've informed the DVLA, they will refund any tax that is due back to you. You'll need to fill in the appropriate forms to inform them that the vehicle has been sold, exported, scrapped or declared off the road with a SORN notice. The legalities The new system will make it much more difficult to evade paying tax, due to the introduction of the ANPR systems, which will make it fairer for all of us. By law, it is still an offence for anyone to use or keep on a public road a vehicle that should be taxed with VED. So, tomorrow you can take your car tax disc off the windscreen of your vehicle and dispose of it. Alternatively, there are some that claim the old tax discs will be worth a few quid in the future, so you may even want to keep hold of it. You can download a PDF produced by HM Revenue & Customs by clicking on the link below: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/264624/3._Vehicle_excise_duty_-_administrative_changes.pdf