You’ve probably heard that the humble tax disc is now a thing of the past, and you’ve heard right. But, what exactly does that mean? How will it affect the millions of car owners throughout the country, and what happens when you’re buying or selling? Well here, we explain the new rules on paying car tax, and what it means for you.
The first important thing to remember is that although the tax disc has been abolished, car tax – or Vehicle Excise Duty to give it its proper name – is very much here to stay. The only thing that’s changing is the way it’s administered and controlled.
The changes took effect on October 1st 2014, and from that date, motorists will no longer be required to display a valid tax disc in the windscreen of their car. Instead, the car’s tax status will be stored on a central database and offenders will be caught with ANPR (Automatic Number Plate Recognition) cameras, rather than your local Bobby noticing an out-of-date disc in your car. It’s said this new arrangement will save the Government around £7 million in costs.
Along with the new system, there are also new, more flexible ways to pay your road tax. It’s thought that most will pay via Direct Debit – set up either online at https://www.gov.uk/tax-disc, or at the Post Office – which gives you the option of paying annually, six-monthly or, for the first time, monthly. The latter two options do carry a 5% surcharge, but that’s better than the 10% charge motorists used to pay on the six-monthly option.
If you don’t fancy setting up a Direct Debit, you can still pay over-the-counter at the Post Office, or by credit/debit card via a 24-hour hotline (0300 123 4321), to which charges apply. And, the DVLA will still send out notices to remind you of when your tax is up for renewal.
The other big change, and the one that has the potential to catch people out unwittingly, is that cars can no longer be bought or sold with tax. If there’s any tax outstanding on the car, the current owner must it claim back during the selling process (you can only claim for a full calendar month) and the new owner is responsible for arranging their own tax on the vehicle before driving it. Be warned; there is no ‘grace’ period.
This throws up a number of complexities for buyers, private sellers and for dealers alike. The good news is that we are here to help as always.