Abolition of the Tax Disc

On December 5th 2013, the Chancellor of the Exchequer, George Osborne, announced that the law would change in 2014 in an attempt to, “reduce tax administration costs and burdens associated with vehicle tax.” These changes have resulted in the abolition of the paper tax disc from October 1st 2014. This means that the paper tax discs will no longer be issued or printed and the need to display them will therefore not exist. Instead, the DVLA will digitally monitor and record those who have or have not paid their tax or declared their vehicle as being off-road and on-road enforcement will be carried out entirely by Automatic Number Plate Readers. This is a hugely significant change to transport laws given that tax discs have been issues and displayed since 21st January 1921, much earlier than many people realise. However, while you may be jumping with joy at the abolition of the tax disc, is it as good as it sounds? Take a quick read of the following points and let us know what you think! A surely welcome feature of this new system in terms of payment is the new found flexibility that has been implemented. Prior to October 1st 2014, the only option available to motorists when paying road tax was to pay annually or sixth monthly which, while accepted, was not always practical for many people. This was for a number of reasons including that of finance and varying durations for the necessity of having a vehicle taxed. From October 1st, vehicles can be taxed on a monthly basis, a sixth month basis or, annually. This is a feature of the new system that works entirely for the majority of road users, as many will surely continue to pay their road tax annually but those who would rather opt for six month or monthly payments are no longer marginalised and can now pay in accordance with their finances and personal needs. This is one of many preferred features of the scheme as it creates such sought after ease when dealing with vehicle administration. While the ease of making payments by direct debit and the more varied durations of which tax payments can be paid for are surely welcomed with open arms. However, the changes in vehicle tax laws and procedure are not all considered positive. For example, the purchasing of vehicles now has a different procedure as a result of this change. Prior to October 1st 2014, cars could be sold and the tax transferred. This saved the buyer of the vehicle from having to re-tax it, as the tax already paid would not expire until it meets its expiration date. The changes made means this is no longer the case and new tax will need to be paid to vehicles upon purchase. This could be seen as something of an inconvenience to those purchasing a vehicle, as it is an additional cost that has never before existed. It remains to be seen if the improvement in the tax payment method will prove to serve as a sufficient compromise for this additional cost when purchasing a vehicle. These changes are expected to strike a chord with businesses that use company cars and especially fleet operators. The abolition of the tax disc means, “significant savings for fleet operators and other businesses from not having to handle the administration of tax discs. “ While this of course does not apply to every business many UK businesses have company cars and official vehicles that face this annual inconvenience. The administration of the tax disc has always been a burden from the payment to its display but now with the new system of direct debit payments taking effect from October 1st, the previous inconvenience will become a thing of the past as the only administration cost is that of the tax disc itself which can now be paid with greater ease. This is surely to be welcomed by any businesses that use company vehicles as it allows them to dedicate more time to the more pressing matters of running a business while an important matter can be taken care of with considerably greater ease. While the majority of road users and vehicle owners will qualify and benefit from the new direct debit payment method, it does not apply to everyone. It should be noted that the direct debit payment scheme will not be available to first registration vehicles, fleet schemes or Heavy Goods Vehicles (HGV’s). After 93 years of the tax disc gracing our windscreens it will surely be strange to see them go but as it’s in favour of a more contemporary, efficient and cost effective system to replace the tax disc, the response has generally been welcoming! However, if you feel differently we’d love to hear your thoughts on the revisal of vehicle tax and the abolition of the tax disc, so please don’t hesitate to get in touch!