Plan Insurance Blog

Are you aware Tax discs are being abolished?

A new system for arranging road tax will be introduced by the government at the start of October this year. At Plan Insurance we are concerned that the transition to this procedure has not been advertised or explained sufficiently well.
For that reason we have outlined below the key points that we feel motorists should be aware as Tax Discs are being abolished;

Key changes
With effect from October 1st paper tax discs will no longer be issued. The D.V.L.A. will instead hold all road tax information online.
The new system will function much like the Motor Insurance Database and will retain information relating to whether or not a vehicle has current road tax. A simple online search using the registration and the make/model of a vehicle will reveal whether valid road tax is in place. One benefit of the system is that you will now be able to pay for your road tax monthly by direct debit.
Motorists and especially those involved in the motor trade should take note of what will happen to the tax when a vehicle is bought or sold.
What happens when I buy a car?

  • From October 1st, when you buy a vehicle, the vehicle tax will no longer be transferred with the vehicle.
  • You will need to arrange new vehicle tax before you can use the vehicle.
  • You can tax the vehicle using the New Keeper Supplement (V5C/2) part of the vehicle registration certificate (V5C)
  • This can be done online, by using an automated phone service – 24 hours a day, 7 days a week or alternatively, you can still visit a Post Office branch to purchase road tax.

What about when I sell a car?

  • When you sell a vehicle after October 1st you will no longer be able to offer the remaining months on the vehicle’s road tax as a sales incentive to the new owner.
  • The new owner will be responsible for arranging road tax at the point of purchase. To avoid any chance of being fined they should ensure road tax is in place before driving the vehicle on the road.
  • If you sell a vehicle after October 1st and notify the D.V.L.A. you will automatically receive a refund for each full calendar month left on the vehicle tax that you have paid for.
  • As per our advice guidelines on the MID we recommend Motor traders remove vehicles from their record at the earliest possible opportunity after the point of sale. It is important to do so in order to avoid being held liable for any fines for non-compliance with the new legislation or road traffic offences that the latest owner of the vehicle may commit.

We hope this explanation has been of use. It is vitally important you adhere to the new procedures. If a vehicle registered to you is identified as not having road tax and not having been declared SORN, a fine of £80 will be sent to the known keeper’s address. Paying this fine within 28 days will see the amount reduced to £40. Costs will be significantly higher for vehicles that are clamped or impounded.
Non-settlement of fines will lead to prosecution and a court may increase the fine to a maximum sum of £1000. The amount will depend on the circumstances and normally includes any tax arrears owed even the court’s costs.
If you have any further questions please do not hesitate to get in touch.
Alternatively for additional information regarding the changes please go to the Government’s website page on Car Tax Discs