Correct, you can do this at any Post Office which issues tax discs (and have been able to since June 2013).
Take the V5C/2 (the front part of the V5) filled in your (i.e. new keeper's name), insurance (in your name) and MOT to the post office and explain you want to tax it, change the keeper and tax class all at the same time.
They'll sell you the tax disc, keep the V5/C and send it to Swansea and eventually you'll get a new V5 back in your name with a regular tax class on it.
The current owner keeps their disabled tax disc.
Just make sure you get the FULL V5/C FRONT PAGE - not just the new keeper supplement.
Edited by pd on 24/11/2013 at 17:04
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