All Change with Vehicle Tax System

October 2, 2014

Another Great British tradition ended last month – from October 1st road users are no longer required by law to display a tax disc inside the windscreen of their vehicle as proof of payment of their annual road fund licence fee.

The changes are the largest single shake up of the vehicle taxation system since it was implemented in 1921. It comes following work by the DVLA and other agencies to improve how computer databases holding information on a vehicles taxation, MOT test certification and motor insurance talk to each other. Rather than check the ‘old-style’ discs on windscreens, inspectors and the police will use automatic number plate recognition cameras (ANPR) to identify untaxed vehicles belonging to suspected tax evaders. Road users will no longer need to display a tax disc even if there is time left to run on it. The old disc can be removed and destroyed, although some organisations have urged caution until the new DVLA system has settled down, following some initial teething problems.

How will the changes affect you?

Sadly the new system doesn’t mean an end to paying vehicle road tax. To drive or keep a vehicle, CLA members will still need to get vehicle tax and the DVLA will continue to send a reminder when it is due to expire. This includes tax-exempt vehicles like tractors, agricultural engines and light agricultural vehicles that are used off-road on farms, which will still need to be registered with the DVLA.

Some things won’t change – tax price bands will remain the same for vehicles that must be licensed and road-users will still have the options of paying for 6 or 12 months in advance. However, road users will now have the option of paying monthly for their vehicle tax by Direct Debit, but at a 5% premium. Paying for vehicle tax by Direct Debit will mean that, provided insurance and an MOT remains valid, the DVLA will continue taking payments (without expiry) until asked to stop. Payments will automatically stop when the DVLA receives confirmation of change of ownership or a vehicle is taken off the road and a Statutory Off Road Notification (SORN) has been completed.

Paying by Direct Debit will not be available for first time registrations, fleet schemes and HGVs (paying the Road User Levy).

What happens to your road tax when you buy or sell a vehicle?

Under the new road tax system, the process of buying or selling a vehicle will change. Any remaining road tax will not be transferable to the new owner. The vehicle seller will get a refund on any full remaining months tax left up to expiry, which will be sent automatically when the DVLA receives notification that the vehicle has been sold, scrapped, exported or taken off the road.

When buying a vehicle it will need to be taxed before it can be used, which can be arranged online, at a post office branch or by post.

Sellers are expected to inform the DVLA of any change of ownership straight away or face a £1,000 fine. If they don’t, they could still be liable for speeding or parking fines incurred by the new owner.

For more information about the new vehicle tax changes, visit the DVLA website.

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