Guide to the new Car Tax System being introduced on October 1st 2014

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We are all used to seeing the paper ‘car tax’ disc displayed on the windscreen of vehicles (and on forks of motorcycles) that are in use on public roads.  The Vehicle Excise Duty (as it’s officially called) system was introduced in 1921, and since then, over 17 billion tax discs have been issued - enough to go around the world three times!

tax disc on carBut now, after 93 years, the government has decided to change the system to one that is completely electronic.  From October 1st 2014 you will still have to pay car tax (unfortunately!), and the DVLA will continue to send you a V11 renewal reminder when your vehicle tax is due to expire, but there will no longer be a legal requirement to display a disc. 

Why is the paper disc being abolished?

The DVLA say the new system will save £10 million each year in printing and postage costs. Last year alone, it issued 42.2 million tax discs.  Additionally, it is thought that the new system will make it easier to catch tax evaders.

How will vehicle tax evaders be caught?

The DVLA will work with the police and other enforcement agencies to coordinate and monitor compliance with the new system. Automatic number plate recognition cameras together with electronic vehicle registers will be used to check whether or not a vehicle is taxed. If it is not, the DVLA will send an enforcement notice to the registered keeper of the car.  The new system will make it much harder for tax-dodging motorists, putting an end to excuses such as ‘my tax disc is in the post’.

How must car tax be paid in future?

Currently drivers pay their vehicle tax in advance, (in either an annual or six-monthly instalment). From 1st October, motorists will have the option of paying via direct debit, either annually, biannually or monthly. There will be a 5% surcharge for non-annual payments.  As at present, you can apply online1 to tax or SORN your vehicle using your 16 digit reference number from your vehicle tax renewal reminder (V11) or 11 digit reference number from your log book (V5C).

What about selling and buying cars?

This is where the changes as a result of the new system will have the biggest impact and all motorists will need to learn the new rules and comply with them or risk hefty fines:

  • vehicle tax will no longer be transferred with the car, so used-car buyers will lose out on the perk of receiving the remaining months on the car’s tax disk;
  • the buyer will need to get new car tax immediately, and will be unable to legally use the vehicle until it is taxed – so garages will no longer be able to tax the car for buyers to drive away;
  • sellers will be responsible for notifying the DVLA that there has been a change of ownership;
  • sellers failing to do so risk a fine of up to £1,000;
  • any full months left on the car tax will be refunded to the seller by the DVLA.

How to check that you don’t drive an untaxed vehicle by mistake

In circumstances where you are not the owner of a car (eg a hire car, a pool car, a loan car), and you’re worried about the possibility of driving without tax, you can check the tax status of any vehicle by using the Government's vehicle enquiry service,2 entering the vehicle make and registration details. 

Official Video Advice

Vehicle Tax changes: updates and advice from Gov.uk3