Road tax changes: how to get a digital tax disc

A tax disc is displayed on a car in London

You've bought your last paper tax disc - and here's how the new digital road tax system works

LAST UPDATED AT 14:22 ON Wed 8 Apr 2015

The long-serving tax disc has been consigned to history after a new road tax system replaced the perforated paper circle in October last year.

Instead, an electronic database will keep track of who has paid their road tax, officially known as vehicle excise duty. Those who have not face a fine of £1,000.

Here's everything you need to know about the new road tax system:

What has changed?

Since October 1 2014, motorists have no longer needed to display a paper tax disc in their windscreens, even if it has not yet expired. When it's time to renew your road tax, you can pay using the DVLA website, by calling 0300 123 4321, or by applying in person at post offices. 

Do the road tax changes apply throughout the UK?

Yes. The system is identical in England, Scotland and Wales. In Northern Ireland drivers will still need to display their MoT discs, but not their tax discs.

How is the payment system changing?

You will now be able to pay by direct debit, which means your road tax will never expire as long as your car's MoT remains valid. When you sell your car, you will have to let your bank or the DVLA know, to ensure you don't pay more than you owe. HGVs and fleet cars cannot be taxed by direct debit.

Has the cost of road tax changed?

No, the rates remain the same, and depend on the officially quoted CO2 emissions for the car. Owners of the cleanest vehicles pay nothing, while those with the most emissions incur a charge of £500 per year. The DVLA website has a detailed breakdown of the rates.

What happens if my road tax doesn't expire for several months?

You don't have to do anything, although you can take your paper tax disc off your car windscreen if you want to. Your existing road tax will remain valid until its expiry date, at which point you can renew it using the new system.

Are there any downsides to the new system?

Yes: road tax will no longer be transferred with the vehicle, which means the buyer will not benefit if there are unused months left on the tax disc. They will have to renew the tax straight away, which they can do online or using a 24-hour automated phone system: 0300 123 4321. The seller can claim a refund from DVLA for any full calendar months left on the vehicle's tax, but will forfeit the remainder of the present month.

So it will cost us more, on average?

Maybe not, if insurance premiums fall as a result. Julie Daniels, head of motor at comparethemarket.com, told the Daily Telegraph that the replacement of tax discs with a more effective system, and the resultant elimination of tax dodgers from the road, "should have a positive impact on premiums". 

How will the authorities enforce the new road tax system?

Automatic number plate recognition (ANPR) cameras, which track all cars, will catch those who haven't paid up and trigger fines of up to £1,000. However, The Independent quotes a Home Office presentation which it says reveals that ANPR cameras misread four per cent of licence plates - up to 1.2 million per day. Since the system went live there have not yet been reports of significant numbers of penalties being issued in error.

Are drivers trying to take advantage of the new road tax rules?

Apparently not, at least according to the DVLA. Some motoring groups had suggested that the number of untaxed vehicles on the road might increase as a result to the new system, but those fears appears to have been unfounded. "There is the risk that the abolition of tax disc will encourage some people to believe these things won't be followed up," says Ian Crowder of the AA. "But from anecdotal evidence it seems to be working OK so far." Official figures will be released later in the year.

According to insurance comparison site Confused.com, the tax disc had been obsolete for some time as an enforcement tool. "Even before its abolition, the tax disc was not the chief means of ensuring VED had been paid," it says. Instead, the DVLA had used its own databases to keep track of who had not paid, and police had relied on the ANPR system to check for untaxed vehicles.  

Can the system be fooled?

The new system could make it easier for car thieves to operate undetected, says The Sunday Times. "Without the need for a tax disc with the correct registration number, it will be simpler for crooks to disguise stolen cars using a set of fabricated numberplates that have been copied from a properly taxed vehicle of the same make, model and colour," the paper says. The ANPR cameras will not be able to tell the difference between the legitimate car and its ringer.

What about classic cars and other tax-exempt vehicles?

Owners of cars which are exempt from vehicle excise duty will not have to pay anything, but they will still need to register each year on the DVLA website.

What if my car is no longer on the road?

You will need to make a "statutory off-road notification" (SORN) if you are not using your vehicle, not keeping it on a public road, and not wanting to pay road tax - for example if you are mothballing a classic car for the winter. To do so you can apply online, by calling 0300 123 4321 or at a post office. You can submit the application up to two months in advance.

What about driving abroad?

Most European countries require some form of tax disc or sticker on the windscreen and some motorists have expressed fears that foreign police might look askance at vehicles not displaying any tax documentation. The British government says that the European authorities have been told about the changes. "DVLA have informed the European Union that from 1 October 2014, UK registered vehicles that are travelling in the EU will not display tax discs," it says.

How can I check if my vehicle is taxed correctly?

You can look up the tax status of any vehicle by using DVLA's Vehicle Enquiry System. You will still be sent a renewal reminder when your vehicle tax is due to expire.

A short history of the road tax disc

Strictly speaking, there is no such thing as road tax: the correct term is vehicle excise duty or VED. However, few people outside Whitehall refer to the charge as anything other than road tax, and the slip of paper that acted as proof of payment was universally known as the tax disc.

The first tax discs appeared in 1921 and were remarkably similar to the system in use until a few months ago. Although black and white, they consisted of a circular certificate bearing the make, model and registration number of the car. 

Perforations did not appear until 1938, and then disappeared again in 1942, to return in 1952. "This gap might have been caused by the destruction of the necessary equipment during World War 2," according to Motoring.co.uk.

The most substantial change in the administration of the system came in 1961, when drivers were able to buy a 12-month disc at any time of the year. Until then, all discs had expired on 31 December, whenever they had been purchased.

Over the years, various colours and an increasing array of security features were added, and it became possible to renew discs online. Nevertheless, by the time it was abolished last October the tax disc system was fundamentally unchanged from what had been introduced almost a century earlier.

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