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Digital Road Tax explainedBack

DigitalRoadTaxThe paper tax disc was phased out in September 2014, and from October 1st, the new digital road tax system came into play. But many people are still in the dark about how the new system works. Failing to purchase road tax could result in a £1,000 fine so it’s well worth learning the basics about how the new system operates. We’ve put together a comprehensive guide below.

Out with the old, in with the new

Since 1st October 2015, motorists are no longer required to display a paper tax disc in their cars, even if it has not yet expired. When it’s time to renew your road tax, you’ll be asked to pay online using the DVLA website. If you don’t have access to the internet, you can pay at post offices across the UK. In addition, you can now pay for your tax disc using direct debit, meaning your road tax will never need to expire as long as your MOT remains valid and you do not sell your car.

No changes to cost

The cost of obtaining a road tax disc online hasn’t changed, and drivers will be charged the same to renew their car’s road tax based on the car’s level of CO2 emissions. Owners of cars which have under 100g/km CO2 emissions will be exempt from road tax altogether, whilst those with excessively high emissions will incur a charge of £500 per year.

How will non-payers be caught out?

The new road tax system polices cars by using Automatic Number Plate Recognition (ANPR) cameras which can track cars and seek out non-payers, with fines of up to £1,000. However, due to the fact there are still errors in the system – ANPR cameras are reported to have misread 4% of licence plates (1.2 million) per day – the DVLA has said errors will be caught before penalties are issued by cross-referencing number plates with the male, model and colour of car.

Buying and selling of used carsTaxDisc02

The new road tax system affects those who are buying used cars. Vehicle tax will no longer be transferred with the vehicle, meaning the buyer will not benefit from any road tax relief if there is any unused months left on the tax disc. Instead, they will have to renew the bought car’s tax straight away either online or using a 24-hour automated phone system. The seller will be able to claim a refund for any remaining full calendar months left on the tax disc.

Why is the road tax system changing?

The DVLA says the chances are designed to save British businesses millions of pounds in administrative costs every year. Insurance premiums for motorists may also fall as a result of the changes – Comparethemarket.com has indicated that the removal of tax dodgers from the road “should have a positive impact on premiums.”

What do I need to NOW?

If your road tax doesn’t expire for several months, you needn’t do anything just yet, other than removing your paper tax disc from your car windscreen. Your existing road tax will remain valid until its expiry date.

Posted by Leana Kell on 16/02/2015