Farewell to the tax disc - Car insurance - News - Moneyfacts


Farewell to the tax disc

Farewell to the tax disc

Category: Car insurance

Updated: 30/09/2014
First Published: 30/09/2014

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The era of the tax disc, displayed in cars across the UK, is coming to an end. As of the 1 October, tax discs will no longer be issued for those who are renewing or buying their tax. This change is part of a new initiative by the Driver and Vehicle Licensing Authority (DVLA) to reduce costs to the taxpayer, with an estimated £10 million per year being saved.

What the changes mean

The tax disc may very soon be extinct, but this doesn't mean that you no longer have to tax your vehicle. All vehicles need to have up-to-date tax, which can be paid for electronically, online or at the Post Office. The big change is that you won't be issued with a paper disc to display in your car window. Instead, your car will have a digital tax disc that is linked to your license plate number.

But don't think that it will be easier to get away without paying your tax. Just as the tax disc itself is becoming more sophisticated, so are the methods designed to catch out those abusing the system. Instead of looking for a physical badge, DVLA enforcers will now use cameras, which will highlight a vehicle without up-to-date tax. Failing to comply with the new system could incur a £1,000 fine.

No more transfers

Another big change is also taking place. Along with digital tax discs, the rules surrounding the transfer of vehicle tax have also changed.

Ian Gallagher, from the Freight Transport Association (FTA), explains: "From the 1 October vehicle tax will no longer be transferable when a vehicle is sold or transferred. The new keeper must purchase tax for the vehicle if they wish to take it onto a public road and the old keeper will automatically receive a refund on any outstanding full months."

This means that all motorists must remember to tax any new car in their possession as vehicle tax will now be linked to the person and not the vehicle itself. As a result, it cannot be bought or traded.

Big change

These new rules mark the first big changes since the tax disc was introduced in 1921. It's now hoped that more services will move online to put the DVLA in line with modern systems.

In the meantime, the shift to digital tax discs will cost around £8 million to set up, although it will save £2 million in administration costs within the first three years.

What do I need to do?

If you have just renewed or bought your tax, then you don't need to do anything just yet. However, when the time comes to renew, you will not get a new paper disc. You will also need to remember that when buying or selling a vehicle, you will need to pay new vehicle tax – transferring your outstanding tax or accepting it from the seller will not be possible. If you have any tax leftover on your old vehicle, you can reclaim it from the DVLA.

While it's important to have vehicle tax, it's just as important to make sure that your car is insured. Both are essential parts of car ownership and failing to have them will incur hefty penalties. You'll also need a valid insurance policy before you can tax your vehicle, so if your insurance is up for renewal, why not shop around to find a better deal? You can start your search using our car insurance comparison tool.

What next?

Get car insurance quotes with our handy comparison tool

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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