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The end of the road for the tax disc

The 1st October 2014 marked the end of an era for Britain’s motorists, as the traditional paper tax disc system came to an end. Never again will you have to fiddle with the circle of perforations, trying hard not to tear your precious disc in the process, before sliding it into the disc holder on top of the countless other coloured circles. Or worry that your sticky disc holder will fall off unnoticed, leaving you open to a huge fine for not displaying your tax disc.

Road tax goes high-tech

Sadly, car tax, or more correctly Vehicle Excise Duty, has not been abolished along with the famous tax disc. The system has simply gone high-tech. These days, police and traffic wardens can instantly access the DVLA database and see if your car is taxed, so there is no longer a need for physical proof.

With the arrival of number plate recognition cameras, the system doesn’t even need a physical person to check your tax status any more; it can all be done automatically. In fact, the only human being required is the postman who delivers your fixed penalty notice. Motorists will still receive a renewal reminder when vehicle tax is due to expire, but the DVLA will no longer be printing or posting out tax discs when payment is received.

Importantly, car tax is no longer transferable from a seller to a buyer. If your car is sold, the buyer will need to buy road tax for it even if the existing tax hasn’t expired. The seller/registered keeper will receive an automatic refund of any remaining tax from the DVLA. However you’ll only be refunded full months, and if you paid the 10% surcharge to buy just six months tax, you won’t get the surcharge back. You’ll also be refunded for any remaining tax if your vehicle is declared off the road with a Statutory Off Road Notification (SORN).

An historic change

The coloured paper road tax disc has been with us since 1923, although Britain has been taxing road-going vehicles for a lot longer than that. The first levy on owning a moving vehicle was introduced long before cars were invented – back in 1637. The perforated version of the disc that we know today began testing our dexterity in 1938.

The first 12-month tax discs did not appear until 1961, even though quarterly discs had been going since 1923.

Sharing the tax disc savings

It is estimated that the new automatic system will save Britain’s businesses around £7million in admin costs every year. It will also bring significant savings for the government too, which pleasingly they are sharing with the taxpayer.

From October 1st, the premium for paying your car tax every six months will drop from 10% on top of the fee to just 5% extra – which will save motorists an estimated £20 million a year.

An even bigger benefit comes in the form of a new monthly direct debit option from November 1st 2014. Once again this attracts a 5% premium, but it does allow you to spread the cost evenly over the year, rather than finding a lump sum every six or twelve months.

With savings all round, an end to forgery and shorter queues at the Post Office, it’s easy to see the benefits of a paperless road tax system. However, there will still be some of us who miss that annual origami challenge…

But it’s another story to tell to incredulous grandchildren and their friends in the future. The concept of having a little paper disc in the car to show it is legally taxed will seem as old hat as having to go to a public phone box to call someone when you were out.

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One Quote Direct Insurance Services Limited trading as Octagon Insurance Services is an appointed representative of Europa Group Limited and acts as a credit broker and not a lender in relation to premium finance contracts. Registered as a limited company in England and Wales No. 5479983. Europa Group Limited is authorised and regulated by the Financial Conduct Authority, Financial Services Register No. 309794. Registered office: Europa House, Midland Way, Thornbury, Bristol, BS35 2JX.

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