Road tax changes: what you need to know about the new system

A tax disc is displayed on a car in London

The long-serving paper tax disc is no more. Here's how the new road tax system works

LAST UPDATED AT 13:49 ON Mon 3 Nov 2014

​​​​​​Drivers can tear up their tax discs after a new road tax system replaced the tried-and-tested perforated paper circle at the beginning of last month.

Instead, an electronic road tax database will keep track of who has paid - and those who don't face a fine of £1,000.

The DVLA website struggled to cope with a surge of renewals when the new system came into effect, but the site now appears to be operating normally. 

Although the changes to road tax had long been in the pipeline, a survey conducted shortly before they came into effect found that more than half the country had no idea about the new road tax system. 

What has changed?

Since October 1, motorists have no longer needed to display a paper tax disc in their windscreens. Instead they are asked to pay their road tax online, via the DVLA website. Drivers without access to the internet will be able to pay at post offices. In Northern Ireland, drivers will still need to display their MoT discs, but not their tax discs.

Anything else?

You will also now be able to pay by direct debit, which will mean 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.

Did the switchover go smoothly?

Not entirely. On the first day of the new road tax system, the BBC reported that "thousands of customers [were] unable to renew their car tax online" after the DVLA website "was swamped". It described cases in which people spent 13 hours attempting to renew their vehicle excise duty online. The DVLA said that 30,000 more people had tried to access its website than on the same day last year.

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.

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.

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. The police can look up registration numbers on the Police National Computer system, and offenders will face 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. "The report said that numbers are sometimes mistaken for letters and badly positioned bolts, broken or damaged plates and dirt also causes the cameras to wrongly identify vehicles," the paper said. The DVLA said errors would be caught before penalties were issued by cross-referencing number plates with the make, model and colour of car.

Does the new road tax system affect the buying and selling of used cars?

Yes, this is where the changes will be felt most keenly. Vehicle 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: 

The seller can claim a refund from DVLA for any full calendar months left on the vehicle's tax. However, they are also responsible for informing the DVLA of the change of ownership and will face a fine if they do not do so.

Are there any other disadvantages?

The new system could make it easier for car thieves to operate undected, 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 driving abroad?

Most European countries require some form of tax disc or sticker on the windscreen and aome 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.

How much of a problem is road tax evasion?

It's relatively small, figures suggest. The latest estimate of vehicle excise duty evasion is just 0.6 per cent, although that amounts to about 200,000 cars.

So why is the system changing?

The DVLA says the reforms are aiming to streamline the service and to save British businesses millions of pounds a year in administrative bills.

Is there any benefit to the average motorist?

Insurance premiums may fall as a result. Julie Daniels, head of motor at, tells the Daily Telegraph that the removal of the tax disc, and resultant elimination of tax dodgers from the road, "should have a positive impact on premiums". 


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