01 October 2014

Car tax changes – what you need to know

What's changing?

Vehicle Excise Duty, otherwise known as road tax or car tax, is “going digital”, which should, according to the Government, make dealing with car tax a more stress-free and efficient affair for drivers.

As of 01 October 2014, the paper tax disc will be replaced with an electronic registration system and automatic number plate recognition cameras, which check vehicles on the road.

Why is car tax changing?

The switch from paper car tax discs to a digital system is designed to:

  • Give you flexible payment options
  • Make the renewal process easier
  • Make it harder for people to evade paying car tax

The new system will be enforced by police cameras, which will check off a vehicle's number plate to see if it's been taxed. As before, anyone found not paying tax can expect a £1,000 fine.

What if there’s time left on your car tax disc?

Paper tax discs can be removed from your car’s windscreen from 01 October, even if they have some months left to run, as drivers with time left on their paper discs will have their details uploaded automatically.


To renew your car tax, you can apply online on the DVLA’s website, by phone, or at a Post office, using the vehicle tax renewal reminder (V11 or V85/1 – you should get this in the post from DVLA) or the 11 digit reference number from your car’s log book (V5C).

The new system will also allow you to pay excise duty by direct debit for the first time. You have 3 options:

  • Annually
  • 6-monthly
  • Monthly

What about buying and selling used cars?

From October, if you sell a used car, you're required to inform the DVLA that you no longer have responsibility for the vehicle. If you let them know, you'll get a full refund for any months remaining on the vehicle tax, but if you don't you could face a fine.

Failure to notify the DVLA about a change in ownership could leave motorists liable for speeding and parking fines for a car they no longer own. The best advice for sellers is to send the V5C document straight to the DVLA – don't presume the buyer will do it.

And if you buy a used car, any remaining vehicle tax won't be transferred, so you'll need to organise tax for your new vehicle before you get behind the wheel.

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