There are some major changes afoot for motorists. For a start, fiddly paper tax discs– can anyone out there tear something circular? – will be replaced with an electronic tax register, cutting costs to the tune of £7 million and ensuring that tax is paid.
Once changes come into place in October this year, Police will simply have to check your registration plate against the DVLA database to check if your vehicle is taxed. The penalty is £80, reduced to £40 if paid within 28 days. (If the case goes to court, the fine could increase to as much as £1000.)
The paper tax disc was introduced in 1921. The treasury has said: “This is a visual symbol of how we are moving government into the modern age and making dealing with government more hassle-free.”
What are the issues with scrapping the paper tax disc?
While the move will undoubtedly save trees, money and paper cuts, a survey by the AA has revealed some concerns among motorists. For instance, 47% of people thought the changes would make them more likely to forget to tax their car. 70% worried that you could be merrily driving along in the car of a friend or relative and not realise that it wasn’t taxed.
Removing the visibility of the tax situation isn’t the only conceivable issue. The new system will make it impossible to transfer ‘road tax’ (Vehicle Excise Duty, or VED, to give it its proper title) to the new owners of a car, taking away something of a selling point applicable to private car deals. While sellers will be able to claim a refund for the remaining VED on a car, buyers will no longer be able to lump the remaining tax into an attractive deal.
Paul Watters from the AA has said “Cancelling a disc and making the new owner buy a new one will be an added inconvenience for motorists who are changing vehicles, but we appreciate that this is to ensure that no one is unknowingly put at risk of driving an untaxed vehicle.”
Paying for ‘road tax’
Another change will be to the ways VED can be paid: the government is adding the option to pay be direct debit– with a 5% surcharge for administration. At the moment, people can pay for six or 12 months in one go, and paying for six months incurs a 10% charge – this is expected to drop to 5% as well.
Of course, many motorists will be exempt from paying road tax, as it is based on the CO2 emissions from your car, and your car’s age. You will still need to register your car appropriately.
Search all cars with zero road tax.
Changes to the driving licence
Currently in its beta testing stage, another new Government initiative will place all driving licence records online, giving insurance companies, car rental firms and the 40 million drivers in the UK access to a very useful database.
The My Licence project, a database that everyone will be able to search using a driving licence number, an NI number and a postcode, is due to be launched by the DVLA in June – and could mean that honest drivers will save up to £15 a year in car insurance.
Cabinet Office minister Francis Maude, who wants to make the UK the most digital government in the G8, said: “It is great news that DVLA is about to launch online driving records, which can be used by anyone with a driving licence as well as by the insurance industry. This will enable insurers, for example, to price much more accurately, because they will not have to take anything on trust.” (In other words, insurers don't have to 'build in' costs to account for the risk that you are lying about having a clean licence.)
"Digital agenda"
The Government aims to save £1.2 billion through their “digital agenda”, with taxpayers due to save around £500 million this year. The paper driving licence counterpart is due to be phased out in 2015, in another money-saving move.
The Government is also at the very early stages of a vehicle management system that will allow 18 million vehicle transactions each year to be carried out online.
If you’re keen to avoid the cost of VED, search the many cars we have in stock with low emissions and zero road tax to pay. You can also let us know what you think of the changes below, or on Twitter.