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Tax disc to be scrapped after 93 years

Thu, 05 Dec 2013

Tax discs are to be axed, chancellor George Osborne has announced in his 2013 Autumn Statement. But motorists will still pay an annual Vehicle Excise Duty (VED / road tax) fee.

The round paper certificates we all currently display in our car windows have served as proof of this road tax payment since 1921. But now the rise of technology means they are increasingly unnecessary in our constantly connected world – the police can simply look up electronic records instead.

On Bing: see pictures of tax discs
Where does your road tax go?

The question is, will you miss the tax disc after its gone – or have you wasted too much of your life queuing in the Post Office every time it comes to the renewal?

What is the history of the tax disc?

The tax disc was first introduced in 1921, following the Road and Finance Act of 1920 – which first defined them as proof of payment of the Road Fund Licence.
That said, vehicular taxation in general dates back to about 1637 in Great Britain, so it’s a long-standing tradition and is by no means about to go away.

There’s simply no longer any need for a physical proof of road tax payment

The first coloured tax disc appeared in 1923, and original tax discs expired within the year of issue, rather than after six or 12 months as it is today – though you could also purchase a ‘quarterly’ disc.

The first perforated design appeared in 1938 – and thus began the traditional ritual of cursing every time you accidentally tear the disc itself when trying ever so carefully to remove it.

The 12-month system of payment first appeared in 1961, alongside a design that was intended to be more difficult to forge and a four-month fee in place of the quarterly disc.

The Driver and Vehicle Licencing Agency (DVLA) in Swansea (originally known as the DVLC – the Driver and Vehicle Licencing Centre) got involved from 1974, with the next design big change coming in 1977.

Shortly after this the four-month disc was replaced by the six-month disc, there were further design changes in 1987 and finally 2003 – by which point variable rate taxation based on engine size had been introduced. Nowadays road tax is based on this and CO2 emissions, depending on when your car was made.

Why is the tax disc being abolished?

Progress has seen to the end of the tax disc.

Digital records are now so accurate that the police can simply use number plate recognition cameras and the DVLA’s electronic database to see whether a vehicle is taxed or not. And although you can currently still be fined for ‘failure to display’, visual checks for road tax evaders have become far less common.

With so many people now taxing their car online as well – dodging those Post Office queues in the process – there’s simply no longer any need for a physical proof of road tax payment. This will lower administration and postage costs, and put the forgers out of business for good.

Andrew Brady | Motoring Research

Does the end of the tax disc mean the end of Vehicle Excise Duty (VED) or car tax?

Just because the tax disc has reached the end of the road, that doesn’t mean we won’t still be paying Vehicle Excise Duty – the official name for car tax.

The end of the tax disc will save businesses £7 million in admin costs every year

However, it does mean more modern methods of payment will be offered. Just like the TV licence, you will now be able pay for your road tax in monthly instalments via direct debit, rather than one lump sum once or twice a year.

This should make the payment easier to manage for most people, and less easy to ‘forget’ – which these days results in an automatic fine.

You will still be able to pay a six or 12 month fee if you prefer – and this too can be done by direct debit – but it seems these changes could well spell the end to the old ‘taxed and tested’ Auto Trader used car search.

Anyone wishing to still pay for their car tax at the Post Office or over the telephone will still be able to so do.

When will the tax disc disappear?

The tax disc is set to be abolished on 1 October 2014 – so it’s staying with us until well into next year.

In the meantime you will still need to display the disc on your windscreen, or you will still risk being fined.

Will the end of the tax disc save money?

The government reckons the end of the tax disc will save businesses £7 million in admin costs every year.

The cost of taxing your car may also be reduced, with the six-month fee slashed to just 5% more than half of the annual amount. At the moment it’s 10% more.

The monthly payment option will also incur a 5% penalty over the 12-month amount, but this is presumably something many people will be prepared to put up with for the added convenience of spreading the cost.

As is currently the case, the amount you actually pay will depend on either the amount of CO2 your car produces or, if it was registered before 1 March 2001, the size of its engine.

Do people still avoid paying road tax?

The latest figures from the Department of Transport suggest that ‘VED evaders’ – those who drive on the road without car tax – will cost the treasury around £35 million over the 2013/2014 period.

However, this is not only a slight decrease since 2011 – meaning that not much has changed in this area since 2008 – it also represents only around 0.6% of the traffic travelling on the roads of Great Britain over this time.

What do the police and the Post Office think about the end of the tax disc?

According to a Treasury spokesperson:

“These changes mean it will be easier to tax your car, and cheaper than before to do it by instalment.”

The same spokesperson also claimed both the police and Post Offices supported the tax disc’s demise.

On Bing: see pictures of tax discsWhere does your road tax go?Car tax guideThe cheapest new cars with free VED road taxCars that avoid road taxFind out how much a used car with 12 months’ road tax costs on Auto Trader

By CJ Hubbard, contributor, MSN Cars