Changes to the vehicle tax system: What it means for you

Published 29 August 2014

From 1 October the DVLA will replace the traditional tax disc with an all-new electronic system. As a result, owners will no longer be required to display a paper tax disc in their windscreen and will instead tax their vehicle online, with a car’s status as taxed, untaxed or SORN recorded on a database linked to the registration.

By abolishing the paper disc, the DVLA claims it will save more than £10 million each year, while making it simple and easy for owners to tax or SORN a vehicle. However, the road tax bands will remain unchanged and owners will still be able to choose between six or 12 months VED. 

So, what does this mean for me?

Quite a lot. For starters, you will no longer need to display a tax disc. Under the new rules, motorists will need to register their cars online to pay for road tax – or VED to use its official title – and this can only be done via the DVLA website, Post Office or Direct Debit. You'll still get a renewal notice through the post though.

Pay for road tax via Direct Debit? That’s new, isn’t it?

Yes, the DVLA say this will make it easier for millions of motorists to tax their vehicle. From 1 November 2014, owners will be able to pay monthly on a 12 month basis. However, new car buyers will not be able to use Direct Debit. Instead, they will have to get six or 12 months and then set up the Direct Debit when this ends.

Will I get charged for paying monthly?

Yes, owners paying monthly will be subject to a five per cent surcharge, but this is less than the 10 per cent surcharge that's currently applied when you take out six months road tax.

Is there a time limit to paying via Direct Debit?

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

What should I do with my tax disc?

Should you have a tax disc with any months left to run after the 1 October, it can be removed from the vehicle windscreen and destroyed, although motorists with a Northern Ireland address will still need to display their MoT disc.

How will the authorities know if I pay or not?

The DVLA will carry out automatic checks via its electronic database. If you have not made SORN or taxed your car, an automatic penalty of £80 will apply. The Police will also check via number plate recognition cameras and you could face a £1000 fine if you are caught on the road without tax.

What happens when I buy a car?

The vehicle tax will no longer be transferred when you buy a vehicle. Instead you will need to get new tax before you can use the vehicle on the public road. You can do this by using the New Keeper Supplement (V5C/2) part of the vehicle registration certificate (V5C) online or by using the DVLA’s automated phone service, which is open 24 hours a day. Alternatively, you can visit your local Post Office.

What about when I come to selling or declaring SORN?

Simply notify the DVLA and you will get a refund for any full calendar months left on the vehicle tax. The same applies to vehicles that are scrapped or exported. Direct Debit payments will automatically be stopped when you tell the DVLA that you no longer have the vehicle or it has been taken off the road.

How can I check a vehicle's tax status?

You can check the tax status of any vehicle by visiting the DVLA website. This can also be used to check rentals too.

Comments    on 29 August 2014

what about disabled vehicles. how will wardens or tow companies know the owner is disabled.

xpz393    on 29 August 2014

Would the blue disabled badge not suffice?

GrumpahGeoff    on 1 September 2014

What about Trade Plates. What will happen to them?

Mike Richardson    on 1 September 2014

And how will toll bridges and tunnels know the vehicle is tax-exempt and does not need to pay?

David Clark    on 9 September 2014

The dvla are being modest with their £10 million saving. What about people selling a car mid month? The seller loses 2 weeks tax and the buyer is charged for an extra 2 weeks. That must be worth an extra £10M in the coffers.

Phillip Powis    on 9 September 2014

KA-CHING!!!! I wonder how many other ways they can think of screwing us out of money for our own benefit?
Robbing b*******!!

SC    on 26 September 2014

Wait til after the next election to find out!

pez    on 9 September 2014

Yes, so unless you sell a car on the last day of the month and the new owner taxes it from the 1st day of the next month then the tax man will make an extra months money for every car sold.

SC    on 26 September 2014

Let' not be selfish chaps! - after all the DVLA will need all the extra money it can get to pay for the poor dears who have to lose their jobs of issuing tax discs. Maybe they should provide a "tick box" to allow for an extra "donation" in case people want to contribute a bit more for such a good cause!

Diane    on 9 September 2014

Many drivers don't have access to computers or are unable to use them, is a paper form available for them from the Post Office?

Ian Brown    on 9 September 2014

My tax expires on 30th September and, guess what, I've got to pay upfront to tax it for at least six months!! Can't use the new `pay monthly' scheme - 'cos it isn't ready yet!! Another fine mess from the ever-unreliable DVLA. They couldn't organise an egg-and-spoon race.

Tony Shaw    on 9 September 2014

What happens to those people who do not have access to a computer?

Hersheba    on 9 September 2014

As it says debit.........or if you don't have a bank account, at the post office like now!

smudja    on 9 September 2014

A disabled vehicle still requires a valid tax disc

hopalong525    on 9 September 2014

What happens if I purchase a car on 2nd of the Month and the seller has a valid Tax Disc until the end of the Month? The seller won't be able to get a refund as there isn't a full Month remaining & the new owner will be expected to tax the car for the full Month also. This will result in DVLA getting an extra Month's duty paid. Is this correct or can the car tax start on any day of the Month?

   on 25 September 2014

You are correct - The seller wont get a refund as there is less than a month to run, and the purchaser has to pay from the beginning of the month - Set of theives DVLA

Peter    on 10 September 2014

The VED collection scheme is long overdue being brought up to date!
(here's the BUT) with todays computer facilities the motorist would be served if VED was calculated and refunded/charged on a daily basis rather than the whole month, thereby incurring the penalty charge which allows the DVLA to charge twice for part months lost due to transfer dates - this is certainly "fast practice" bordering on fraud. However maybe that was the intentional?

NingPo    on 15 September 2014

Being a driver collecting customer cars for servicing, how will I know if the owner has paid the excise duty even if they say they have. Can I be held responsible if I get stopped by the plod as I do not have any way of checking up to 15 cars per day to see if they are legal.
Trying to use the DVLA website for checking every car is not practical.

Rogerthedodger    on 20 September 2014

Sounds like a really good point. Although with a smart phone (which I don't have) it should be possible, PROVIDED THAT you have reception (and that is far from guaranteed IMHO). So I appreciate that it is awkward for you Tony.

minihaha    on 25 September 2014

Surely it's the registered keeper that gets done as they are responsible for taxing the car and not the driver?

Rogerthedodger    on 20 September 2014

Tony, surely you can completely avoid any problem with this by using trade plates

G    on 26 September 2014

This is an extremely valid point. A slight variation on this is two months ago I got a courtesy car from a well respected garage. I noticed it was out of tax so refused it. If I had taken it, who would be liable?

The kid    on 25 September 2014

Are you aware that we elected these people who make these rules. So you know what to do when it comes to election time.

the1beard    on 25 September 2014

How will we know when we need an mot ?

Partist    on 25 September 2014

In exactly the same way as we do now.

jeffinmid    on 25 September 2014

What about disabled drivers

Deacon    on 25 September 2014

The only people who will gain is thieves who clone number plates..The honest motorists have been robbed again.We allow those we put in power to do it and sit back at voting time..( I am also guilty ).

wickhamhenboy    on 25 September 2014

you indicate the police are going to use ANPR to check if a vehicle is taxed. Are you sure? I don't think this is a role they carry out.

Petrolhead52    on 25 September 2014

I have just renewed my tax online and the process was quick and efficient. Usually I endure a long queue in the Post Office, so this was a treat! However, we always used to have to show a valid insurance certificate. This is no longer required. I know the Police can tell whether or not a vehicle is insured via ANPR, so it is a logical step to add Tax and MOT to the list. I can see why this will save money.

Ethical reviewer    on 26 September 2014

Not all cameras are vehicle recognition cameras. So many who try to dodge the tax can drive around on side roads locally without paying the road tax. Yes, it saves 10 million pounds for the DVLA but there will be even more un-taxed vehicles on the road causing accidents and extra costs to the law abiding drivers

SC    on 26 September 2014

Automatic fine? Ha ha! The real crooks won't give a damn - like illegal immigrants, travellers and other "non-persons" etc they don't have proper addresses and can just "disappear". No tax disc on show will make it easier for them. As usual, will only effect or inconvenience law abiding people.

taxing    on 26 September 2014

as my current tax disc expires on the 30th sept will I receive a new disc as its still in the current legislation or not?.

Austin Anorak    on 26 September 2014

My car was registered in'99. When I went to tax it online and tried to set-up a monthly direct debit, it appeared that this option only applies to cars registered from 2001 onwards. Have I read it wrongly?

expat 1    on 30 September 2014

How will you get over the not having a tax disc when driving in France as police check that they are in date if you get stopped.

SC    on 6 October 2014

Good question - hopefully the foreign police forces will be told about the new arrangements and act accordingly. If not it could be awkward - since an on the spot fine etc is almost impossible to get out of...

Bob    on 11 October 2014

What date does the DD come out of your account

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