posted 2 years ago

What you need to know about the death of the tax disc

A brief history of road tax and how to keep your car legal from October 1

What is it?

The tax disc, Vehicle Excise Duty or VED is one of the most iconic – yet unloved – aspects of British motoring. Since 1921, the small circle of paper sitting in the bottom left hand corner of the windscreen has reassured passers-by and policemen that a vehicle’s owner had paid his or her fair share towards to construction and upkeep of the British road network. While many people still refer to the tax disc,  road tax was abolished in 1937 and replaced by  Vehicle Excise Duty .

VED is a tax on cars, not roads, and it goes straight into the general Treasury fund to be used for whatever the Government thinks is most important.

Bentley Continental GT

Sounds expensive – how much does that cost?

For cars registered before 1 March 2001, the rate of vehicle tax depends on its engine size. The rate for cars registered on or after 1 March 2001 depends on CO2 emissions and fuel type.

The Government’s desire to use taxation as a way to drive “dirty” cars off the road means that the price you pay for a tax disc is now based on a  sliding scale of C02 Emissions .It’s free to “tax” a car producing less than 100 grams of C02 per kilometre, including all-electric vehicles such as the Nissan Leaf and low-emitting models including the new version of the Toyota Aygo. However, it costs £500 per year to tax a vehicle emitting over 255g/km, such as the Bentley Continental GT.

What’s changing?

From 1st October 1, 2014, you’ll still need to tax your vehicle but you won’t get a tax disc. The Government says that delivering more services digitally will help it cut costs. Switching to digital tax discs will cost £8m to set up but will save £2m a year in administrative costs within three years.

To drive or keep a vehicle on the road you will still need to get vehicle tax and DVLA will still send you a renewal reminder when your vehicle tax is due to expire. This applies to all types of vehicles including those that are exempt from payment of vehicle tax.

From 1 October, when you buy a vehicle, the vehicle tax will no longer be transferred with the vehicle. You will need to get new vehicle tax before you can use the vehicle. Sellers have a duty to inform the DVLA of a change of ownership and face a fine of up to £1,000 if they fail to do so.

You can tax the vehicle using the New Keeper Supplement (V5C/2) part of the vehicle registration certificate (V5C) online or by phone - 24 hours a day, 7 days a week.

Alternatively, you can do it at a Post Office.

Nissan Leaf

Is there anything else I need to know?

If you sell a vehicle after 1 October and you have notified DVLA, you will automatically get a refund for any full calendar months left on the vehicle tax. You will no longer need to make a separate application for a refund of vehicle tax. DVLA will automatically issue a refund when a notification is received from the person named on the DVLA vehicle register that the vehicle has been sold or transferred, scrapped, or removed from the road.

One of the biggest changes will be the ability to pay by Direct Debit

From 1 October 2014 (5 October if setting up at a Post Office), Direct Debit will be offered as an additional way to pay for vehicle tax. This will be available for customers who need to tax their vehicle from 1 November 2014.

The new Direct Debit scheme will allow motorists to pay their VED either monthly, bi-annually or annually and enjoy the administrative convenience of having their licence renewed automatically.

At present, paying VED bi-annually attracts a surcharge of 10 per cent. Biannual and monthly payments made by Direct Debit will attract a lower 5 per cent surcharge.

The DVLA estimates that the scheme will cost £8m to set up but will save the Government £2m in annual administrative costs from 2017.

Provided an MOT remains valid, the payments will continue automatically until you tell DVLA to stop taking them or you cancel the Direct Debit with your bank. Valid insurance should also be in place for vehicles registered in Northern Ireland.

The Direct Debit will be cancelled and payments automatically stopped when you tell DVLA that you no longer have the vehicle, or the vehicle has been taken off the road and a Statutory Off Road Notification has been made.

Will everybody be able to pay by Direct Debit?

Not everybody. The scheme will not be available to first registration vehicles, fleet schemes

Checking the tax status of a vehicle

You can check the tax status of any vehicle  online .   This can also be used for rental vehicles.

The DVLA has produced this helpful video outlining changes to vehicle taxation:

A personal view: “No-one likes having to pay their car tax, particularly as there’s no guarantee that the money you spend on that little circular disc of paper will be used for road improvements.

“However, motoring.co.uk supports anything that makes motoring easier. This  move is likely to simplify the process of car taxation while removing unnecessary administrative costs from the process of tax collection.

“I really like the new option to pay by Direct Debit, which should help to smooth the annual cost of a vehicle excise into a more manageable monthly expense. It’s also great news that the Direct Debit option will attract a 5% premium rather than the 10% premium currently charged when people opt to renew their car tax twice a year rather than annually. That said, it would be even better if the Direct Debit option was exactly the same price as cash option and I can see no good reason why that shouldn’t be the case.”

 

I really don't know what all the fuss is about. Your car is still to be taxed & if you fail to do so DVLA or an ANPR camera will catch you out as before. Only thing that's different is you don't have a silly little bit of paper stuck on your windscreen.

Far too many people who haven't read the details of this change before commenting on here. This has not been a road tax since Churchill changed it into VED in the thirties. Far too many people dreaming up conspiracy theories involving Margaret Thatcher. Do you really think that she planned this back in the 80's when computers were still a dream for society. Vernon Taylor, you could have just typed the last 6-7 lines of your entry to make your point. Here in NI we have MOT discs on our windscreens. Failure to display can be a fine of £200. No mention of what will happen with these. In the Republic of Ireland, they display VED, Insurance and MOT (or rather there versions of them). Instant visual reference points. In the USA your tax and indursnce go on your number plate. I like that system. As for losing the current months VED on selling your car, that is the current system with the paper ones. I only ever sold/traded my cars in the last week of the month, that way there was no loss when I applied for a refund. Then I waited till the first of the month before retaxing the next one ir made use of the 14 days grace period. Surely we can all still do this. As for putting the duty onto fuel. How do you work round people who have bought VED free cars (less than 100gm/km) or those who those who are VED free. Personally I have to say I like the idea of a monthly DD. But I do agree that it should be cheaper, but I can live with 5% instead of 10%. Once my VED disc is on my windscreen I never look at it again. There's littlE chance of failing to remember when your VED is due. You will be sent a letter as under the current system. Cloning, however, I think will be s problem. Let's hope it all goes smoothly.

Lots of moaning for a system/charge that is already in place! Currently you can only claim a refund for each full month and you get charged 10% additional for making 2 payments a year instead of 1. Sure, it would be better for direct debit to be free but i'll take the 5% saving and ease of paying monthly..

So after 1st October, can existing tax discs be removed from windscreens and chucked away, or is the rule just for tax idscs which are paid for AFTER 1st Oct. I have not seen this information anywhere.

can

I always thought that road tax was for road repairs, and all the fines we pay go into the pot for other things, seems we have been stuffed in the arse once again by our government!!!!!

I remember rather too well the first Conservative government that wasn't conservative. Thatcher deliberately introduced the Poll Tax in such a way that was unacceptable in order to make a foreign style property value tax acceptable. She told the nation the new Council Tax is a tax and not a charge for services and so it must be paid and need not represent value for money. The population was mostly so relieved the Poll Tax had gone they accepted the new tax without a murmur of protest. The Mr. Hyde side of that Jeckyl-and-Hyde tax is still hiding in the shadows waiting to leap out like a bogeyman. Since that time every government has been Tory regardless of the colour of its clothes and each has further tightened the noose of regulation around the necks of the population and each fresh pile of horse dung has been gift-wrapped in pretty paper. This latest thing is no different and is more about regulation than increasing revenue by cutting costs. It certainly isn't a fairer system for it it was the unused portion of tax would be refunded at a daily rate and not a monthly one even though the technology would make that possible at no extra cost. Thatcher said "there is no such thing as society". What she meant was she wanted there to be no such thing as society and started the ball rolling for future governments to end society for good by removing the glue that holds society together. I will not play that game and will continue to queue at the local Post Office and chat with whoever is there for as long as I can. I will also continue to pay using the Queen's currency or a personal cheque for as long as I can.

What about the MOT disc the all vehicles inNorthern Ireland has to carry in the windscreen, does this mean that this is to be done away with as well.

Why does motor bikes not show on this?

If I sell my car on the 1st of the month then I loose 30days tax cost? Scandalous!

HOW WILL THE POLICE KNOW A CAR IS TAXED OR NOT WITH NO DISC . IT IS WRONG THERE SHOULD BE A DISC IN THE WINDSCREEN TO SHOW THE CAR IS INSURED AND MOT NEVER MIND TAKING OUT THE TAX DISC

Put the tax on fuel with all the other tax. Anyone who is exempt in any way, already is regitered and gets a certificate to proove it. This cerificate could be produced when buying the fuel thus givng them the required entitlement to the correct discount.

What about borrowing pool company cars, renting cars, courtesy cars, road testing a car you wish to purchase. Are you supposed to check online (assuming you have access) before you drive said categories of vehicle? Who's responsibility is it to ensure taxed - owner or driver ...??? Can see a mountain of problems here unless I'm missing something ...

Are all police and pcso on foot to have naproxen cameras on their uniforms at all times? It is easy to see when a car has no tax disc in the window but now all cars will not have one, so are they going to be doing vehicle checks all day when walking around? Why not just have a little sticker that is either window mounted or on the number plate that is tamper proof? That way anyone can see if a car has a valid tax disc?

In response to those who think it is a good idea to add the VED to the price of fuel. The government wont do it, because there are people in our society who are exempt from paying VED, namely the disabled claiming mobility allowance (I don't begrudge them this at all), oh yes and our queen.

My number plates were stolen off my car.So now replaced,does the thief have immunity with the plate recognition system if he has placed the plates on a similar model,if I keep my car taxed insured and MOTd,he is laughing at the system.The only way that he would be caught is by a physical stop and the chassis no, etc checked

another conservative scam the rich looking after the rich

I've said for yrs that the ved should be abolished and the duty added to fuel that way more efficient vehicles pay less and the more u use vehicle the more u pay and before someone jumps in saying that I must not use vehicle a lot we have 2 family cars and I am a self employed courier so we do use more than the average amount of fuel

got to agree put it on the fuel but does this not defeat the cutting down on emissions.???

So basically every time a car is sold the govt will pocket a months tax, so in effect every time a car is sold in this country the govt will take a months tax from it. Sell a car today you wont get Septs tax back but the new owner has to buy tax from the start of the month, one months extra tax to the govt!

I think Alan Panter has missed the point - whilst we all agree Car Tax SHOULD be used for maintaining the roads; as the article says, this money goes into Central Government funds to spend as they choose. I agree with Ralph Steer that cloning a registration number is now going to become rife - it saves the criminal the trouble of trying to fake a Tax Disk for the windscreen. Perhaps the Minister For Transport would like to comment.....

Display an insurance and MOT disk. Put the tax on the fuel then no one escapes and you pay for what you use.

I agree with ralph steer, this is an open invitation to criminals to milk the system.do the dvla have any sense at all?

I used to cover 20000 miles a year and my Grandad did 1200 miles a year and have always said road tax should be on petrol then everyone who uses the road pays and the more you use it the more you pay. This way no one can avoid paying road tax

I hope this has been thought through. Any criminal cloning a registration number gets instant legitimency. It will appear they have tax, insurance and mot. An added bonus is that any offences will track back to the true owner. I can see dark internet cloning services setting up!

I agree with Paul Clark, however, I don't think saving money has anything to do with the exercise. I suspect that there may be a fiddle taking place and that's where the 8 million will be going.

It is not fair for the old people, not everyone as a computer or knows how to use one. As post office are closing all the time, and not all people can do direct debit . To charge for direct debit is just another way of ripping us off

Pay a surcharge for direct debit - don't think so! Most utility suppliers give discounts for direct debit, why can't road tax be the same. Make it an incentive.

If the change is all about saving money, what's wrong with the old argument, put 10p on a litre of fuel and those who use the roads most pay for them and there's NO extra cost involved. £8m saved on DAY ONE. Simple

For mark.b. the piece of paper in the windscreen does not prove the vehicle is taxed, there are plenty of ways to forge that paper disc using apps and a colour printer...to check if a vehicle has been taxed doesnt change on 1st october...

How long before the computer goes pop....its a way to catch you out...The disk is a regular reminder of when your tax runs out...how many are going to get caught out and automatically fined....lets see.

If VED is being spent on suitably road repairing materials then why are relatively new roads constantly ripped up and re-laid? More "materials on the cheap" more "Weekend overtime" for the lads. The road system is a joke.... 8M pounds to set up what for Gods sake. The information is already on the system, all they are doing is processing it differently. And yes, why not be making the savings immediately. What is so poor about the new system that it takes 2 years to start working right? The motoring organization should stop slapping themselves on the back for cheap wins such as "this will make things easier" and start concentrating on the central issues like "why are you still ripping off our members Mr Government".

Sorry to seem tight, but why should I pay extra for Direct Debit when it is a computer transaction. Personally I`d rather pay cash over the counter with the benefit of a nice smiley face to greet me and no extra charges, road Tax is expensive enough as it is! This is yet another ridiculous STEALTH TAX. Make Direct Debit a free monthly transaction and really save on administrative costs.

A complete waste of time if it's not broken don't mend it.

I have 3 vehicles all of which are currently taxed,after the 1st October do I need to display the ved disc or can I remove them from the windscreen

As per Roberts comment about the government requiring the tax to be paid twice for the month that a vehicle changes hands. I made this same comment when it was first announced but the press don't seem to have caught onto this!!

what happens if your car is taxed till march 2015

How on earth is the system costing £8 million to set up? If it cost £1 million that would be excessive. Both government and tax payer are being ripped off again. The Minister and the person running the DVLC need to be fired. As for the £2 million a year from 2017, why isn't this being saved straight away?

The scheme will save money. Ha , bludy, ha. Computer firms are very good at selling systems, very bad at making them work. Another stitch up.

I think it is wrong that the Gov't should get an extra month's tax every time a car is sold second hand. The tax is not transferable, but you only get a refund for complete months unused and the buyer has to pay from the start of the month in which he buys the car. It would not be not a major problem with a computerised system to make it work to the day rather than to the month. Denise, yes you can still SORN your vehicle. Jules, It will only cost 5% more if you pay monthly or bi-annually by DD. Paying by DD once a year will not be charged extra. Currently you pay 10% extra if you pay bi-annually. Even so, they should give a discount for annual DD! Carol, It is currently legal to delay buying a new disc for up to 14 days, but you have to keep the car off the road until it is taxed. I have not seen anything that says that is changing.

How do I know without a tax disc that my lease company has taxed the car ????? Who, if it hasn't has broken the law driver or lease company ?

if I take my car off the road for 3 months can I ask for a refund as previously making a declaration

My Tax runs out in March 2015. Can I still display my Tax Disc or will it be an offence.

Under the new system if your mot expires your road fund payment will cease... So you will be breaking 2 laws when you fail to get an mot for a vehicle on the road.

don't like the idea of having to pay extra for direct debit, With the utility companies you get a discount. Just looks like the Government again is trying to rip off the public again

my tax runs out 30th sept ,i would like to pay direct debit does this mean i have to wait another year