No more tax disc: UK Vehicle Excise Duty road tax changes explained.

No more tax disc: UK Vehicle Excise Duty road tax changes explained.

Since the UK tax disc was phased out at the start of October 2014, some people have simply binned them, but most haven't even bothered to remove it from their screens.

Now, just a few weeks since the paper tax disc was scrapped, the changes appear to have spawned a rather unusual new market.

The discs – which are now worthless – have been spotted appearing on various auction sites, such as eBay. Some have attracted multiple bids while others are listed for up to £1,000. 

If it sold for this, it would break the world record of £810, which was paid for a tax disc that expired in 1921. Experts are advising those with recently bought, or older tax discs lying around, to keep them in good condition as prices may continue to rise.

“Vehicle Exercise Duty” Changes Explained

As of October 1st 2014 the colourful paper circles are no longer being issued and the requirement for motorists to display them in their cars ends. In the tax disc's place comes a new system for paying your road tax, or Vehicle Excise Duty to use its proper name. 

This overhaul of the road tax arrangements ends the tax disc's 93-year reign and promises to make paying your car tax easier  while rendering the whole system cheaper to run. There is a catch, however, as you'll find out below.

The new road tax set-up should also make things tougher for those seeking to avoid paying road tax. Rather than the visual check that the tax disc made possible, the authorities will rely on numberplate recognition cameras to determine that a vehicle has been taxed. 

 

Below we answer the key questions surrounding the new UK Vehicle Excise Duty road tax regime. Scroll down the page for everything you need to know about the death of the tax disc and what comes next...

 

What do the road tax changes mean for you?

 

The new car tax system isn’t being phased in gradually; UK motorists now no longer need to display a road tax disc on their car windscreen.

 

Even if you have time left to run on your car tax, the little disc can be removed and binned, framed for posterity or disposed of in a burning longboat on the garden pond, whatever you feel is appropriate.

 

This doesn’t mean you don’t have to pay car tax though. The DVLA will send you a reminder when your road tax is up for renewal in the time-honoured fashion, you can then pay your road tax online, over the phone or at the Post Office.

The road tax price bands remain the same, as do the existing options of paying for 12 or 6 months tax upfront but from November 1st there will be the option of paying your car tax monthly. This new monthly option arrives in tandem with the facility to pay your road tax by Direct Debit. 

Drivers paying in monthly instalments from their bank accounts will be subject to a 5% surcharge on top of the road tax price itself. That’s less than the 10% that’s added when you pay for six months tax, an option currently used by 23% of motorists. Only the one-off annual payment comes with no extra charges. 

The key advantage of paying your car tax by Direct Debit is that the DVLA will continue taking the payments until you tell them to stop. It means that you’ll no longer need to remember to renew your car tax, it'll just happen and you can get on with more exciting stuff - like remembering your MOT.

What happens to your road tax when you sell your car?

Under the new car tax system, the process of selling your car has changed. Any remaining road tax will not transfer to the new owner with the vehicle.

Instead, the seller can get a road tax refund on any tax remaining on the vehicle, while the buyer has to pay to re-tax the car.  

The tax refund on a sold car will be sent automatically when the DVLA receives notification that the car has been sold, scrapped, exported or taken off the road with a Statutory Off Road Notification (SORN).

Sellers are expected to inform the DVLA of any change of ownership straight away or face a £1,000 fine. If they don’t, they could also still be liable for speeding or parking fines incurred by the new owner.

Information on whether or not a car is taxed is available online via the Government website. All you need is the make and model of the car plus the registration number.

Is there a catch to the new Vehicle Excise Duty regime?

So far, so good for the new road tax system but as often seems to be the case, there is a catch.

The problem that's getting motorists riled centres around the refund you get on outstanding road tax when you sell your car. When ownership of a vehicle is transferred the previous owner gets a refund on any outstanding road tax but that refund is calculated from the beginning of the next month. The new owner, on the other hand, has to tax the car anew and their bill is calculated from the beginning of the current month.

What this means is that the Government effectively collects two lots of tax on the car for the month where ownership is transferred, one from the new owner who pays for that month and one from the previous owner who doesn’t get the tax for that month included in their refund. It's sneaky stuff and should give a useful boost to the exchequer, but at the expense of motorists.  

What will the tax disc changes mean for policing road tax?

It’s been the case for a while that most inspectors patrolling the roads in search of un-taxed vehicles use automatic number plate readers instead of visually checking the tax disc. The police also rely heavily on number plate recognition cameras to catch untaxed drivers out on the road so in that respect, very little will change.

What the new system brings is an estimated saving to the tax payer of £10million per year.

The tax disc has had a good innings. More than 1.7 billion of them have been issued since 1921 and in 2013 a total of 42.2million were issued by the DVLA. You can’t stop the relentless march of technology though and the new system promises real improvements in the UK road tax system that should benefit motorists and save money.  

Car tax changes: key questions answered

Where can i buy my car tax?

Online, by post, or at a Post Office. Monthly payment is now an option but it’ll cost more in total. You’ll still get a reminder.

Can I transfer my car tax?

No, tax will be automatically refunded when you sell or scrap the vehicle and notify the DVLA via the V5C.

Can I see if a car is taxed?

You can check the status of any car tax via the Government website. Visit gov.uk/check-vehicle-tax and enter the reg number.

How will car tax be monitored?

Police cars are fitted with number plate recognition cameras already and the cameras are used across the road network.

What do I need to do?

If you’ve already got tax, the only thing to do is remove the disc from your car. Maybe frame it for posterity.

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