As of 1 October, 2014, the car tax disc no longer has to be displayed and car sellers won't be able to transfer cover to buyers. We explain all.
What is happening to the car tax disc?
The car tax - or vehicle excise duty as it's officially known - disc was introduced in 1921. Since then it has always been a legal requirement to display one - even in the case of vehicles that have been exempt from paying the charge. But from 1 October this will no longer be the case. Car tax discs will no longer be issued and even if you have a disc with months remaining you no longer have to display it.
How will car tax evaders be caught?
The DVLA, the police and other enforcement agencies will use automatic number plate recognition (ANPR) cameras together with their electronic vehicle register to check if a vehicle is taxed or not, and so will no longer need to rely on physically checking the tax disc.
But why abolish the disc?
The DVLA say this is a cost-cutting exercise and that getting rid of printing and postage costs will save £10 million each year.
But doesn't this put me at risk of driving an untaxed car?
Some motorists may worry that without being able to check the disc, they could unknowingly drive an untaxed car - such as a hire car, or one from a car pool at work. But the car tax status of any vehicle can be checked on the Gov.uk website using the make and registration details.
What changes are happening to the payment system?
Currently motorists pay their vehicle tax in advance, in either an annual or six-monthly instalment with a 10% surcharge for the latter. But as of 1 October, motorists will have the option of paying via direct debit for car tax that starts on or after 1 November, 2014. Direct debits can be either annually, biannually or monthly, although there is a 5% surcharge for biannual or monthly payments.
Will the changes have any effect on selling a car?
Yes. In the past, when someone was selling a secondhand car they might offer it with, say, "six months MOT, four months tax". But it now won't be possible to transfer car tax. Instead the seller will get an automatic refund for any full months remaining, while the buyer will not only have to insure the car but also tax it before they can legally drive it away.
Won't informing the DVLA of change of ownership slow down the sale?
No. It will now be possible to tax the car using only the "new keeper supplement" section of the V5C. This means that the buyer can go online to the DVLA website or use its 24-hour automated call service and tax the vehicle straight away. You can also continue to buy car tax in a Post Office.
But isn't that just a way for the government to make more money?
Given that it's only possible to pay for unclaimed months, then if a car is sold mid-month both the buyer and the seller will pay car tax for that month, making it a double payment. However, the DVLA says that the car tax changes are intended to be cost neutral and that although they recognise that in some cases there may be a double tax, this is offset by paying automatic refunds rather than requiring the seller to fill in the necessary paperwork, and by reducing the surcharge for spreading the payments.