Tax Discs discarded tomorrow ñ A last look at the key changes Consumers must be aware of


September 2014

Tax Discs discarded tomorrow ñ A last look at the key changes Consumers must be aware of

Tomorrow, the 1st October, signals an end to the significance of the tax discs which have embellished vehicleís windscreens for 93 years. Drivers everywhere can dispose of them any way they see fit.

Of course this does not mean the discontinuation of vehicle excise duty (VED), much to the chagrin of motorists everywhere. Rather, tax will be paid via alternate methods which are in line with a modernised, tech-savvy nation. As for those who arenít technologically inclined or those who are just completely unaware, it is imperative to take a vested interest in the new reforms, or else risk parting with extra cash due to self-imposed ineptitude.

Tax discs are being replaced with digital records made by the DVLA, and as such a paper tax disc is no longer required as proof of paid VED. However, any conniving motorist seeing this as an opportunity to hoodwink the taxman and skip paying their VED will be picked up by number-plate recognition surveillance. These mechanised cameras will swiftly assess snapped number-plates through reference to the DVLAís digital tax register, and any motorist found wanting will be subjected to a severe penalty.

The DVLA has also done away with the transferral of tax from a buyer to a seller. In place of this system, sellers will be reimbursed any full months left on their already-paid VED term. Buyers, on the other hand, must purchase new VED before they are able to take their freshly acquired motor for a spin. This new tax is projected to amount to an average of £175 a year, potentially burdening anyone seeking for a cheap second-hand car bargain.

A note to seller: regardless of whether you are eligible for reimbursement due to outstanding months of paid-for tax, you are compelled to notify the DVLA when you sell your car. Any breach of this requisite will result in a fine amounting up to £1,000 ñ moreover, you will have to foot the tax bill for the individual you sold the car too and have to pay any driving penalties they incur.

Motorists can also apply for a refund if their vehicle is written off at an Authorised Treatment Facility (ATF), exported or is no longer on the road. In order to prove your vehicle is no longer being driven, individuals must send off a ëStatutory Off-Road Notificationí to the DVLA, and await acceptance.

The last key reform is set to be implemented on November 1st, entailing a change in the manner of payment. At present, motorists paying via direct debit have had to do so through half-yearly or yearly payments, with the former option incurring a 10% extra charge.

However, from 1st November, drivers will be able to pay their VED on a 12-monthly basis, allowing them to budget more efficiently. However, both half-yearly and 12-month direct debit options incur a 5% sur-charge ñ half of the previous added cost, and individuals will have to assess which option is the most cost-effective & convenient for them.

More likely than not, this reshaping will be welcomed by consumers struggling with piled up debts, as it allows them to make more affordable payments, and tailor their salaries to this end accordingly. With a recent poll showing that 53% of motorists would pay on a monthly basis, with many expressing an inclination to pay more if allowed to spread out outgoings across the year, certain motorists are indeed pleased by the DVLAís new regulations.

But not everyone is chuffed with the DVLAís new rules on VED, with the Royal Automobile Club (RAC) stating the eradication of car tax discs will set the UKís economy back by £167m. Moreover, the RAC believe that the current estimation of 1m drivers currently on the road without insurance will be mirrored by the number of motorists not paying their VED following the abolition of car tax discs.

The DVLA, however, has rubbished these claims, with a spokesman stating: ì'there is absolutely no basis to these figures and it is nonsense to suggest that getting rid of the tax disc will lead to an increase in vehicle tax evasion.'

The number of tax-dodgers is intrinsically linked to the effectiveness of the number-plate recognition surveillance, however in theory there appears to be not much substance to back up the RACíS claims.

Time will tell; In the meantime, it will prove costly to not be in the know of the upcoming car tax changes ñ it is more pressing than ever to be attentive both at the wheel, and away from it.