The tax disc as we know it is to be abolished on October 1 causing a potential headache for the millions of people who buy and sell used cars every year.
From October 1, the paper tax disc in cars will disappear. It will be replaced by an electronic equivalent. This will allow drivers to pay for Vehicle Excise Duty (VED), or road tax, on a monthly basis by direct debit for the first time, albeit with a five per cent supplement. Drivers not on the internet will be able to tax their car via Post Offices as they currently do.
The paper tax, first introduced in 1921, currently moves with the car. When you sell a used motor, you simply inform the DVLA with the slip of paper from the V5c. Although it can delay things if you don’t, many sellers don’t bother because the onus is on the new owner to notify the DVLA of the change of ownership and get an updated V5c to prove they’re the car’s legal keeper.
Under the new system, a car’s road tax becomes non-transferrable; it will ‘belong’ to the driver. When a car is sold, it will cease to be taxed and the owner will get a refund. Rather as with insurance, new owners will have to make sure their new car is taxed before they drive it away. It puts the onus on the seller to tell the DVLA about the change of ownership.
Dealers will have to use trade plates to legally move vehicles around, or register the car in the dealership’s name when they buy it. When they move the car on, they will then have to inform the DVLA or risk heavy fines.
Supporters claim it will save the government around £3m a year and business £7m a year in administration fees. A treasury spokesman said: “This is a visual symbol of how we are moving government into the modern age and making dealing with government more hassle-free.” They also claim it could help reduce the number of untaxed vehicles on the road because it will make paying the charge easier. Although Government figures suggest VED evasion is down to 0.6 per cent, that’s still around 210,000 untaxed vehicles on the road which could result in £35m of lost revenue. Police will use Automatic Number Plate Recognition cameras to tell them if a car is taxed as well as insured.
One benefit to everyone is that the annual fiddle of trying to tear round the perforations without ripping the disc itself will become a thing of the past!