All change for vehicle tax - what you need to know

From today, Wednesday 1 October, you no longer need to display a traditional paper tax disc in the windscreen of your car.

Announced as part of Chancellor George Osborne’s Autumn Statement in December last year, the Vehicle Excise Duty car tax system is moving to a fully digital service.

If you have a tax disc with any months left to run after this date, then it can be removed from your vehicle and destroyed.

Under the new scheme, there are three ways to pay for your tax – online at the DVLA's website, over the telephone on 0300 1234321 or at a Post Office branch that deals with vehicle tax.

The Driver and Vehicle Licensing Agency (DVLA) will still send you a V11 renewal reminder when your vehicle tax is due to expire. You'll have to apply for all types of vehicles, including those that are exempt from payment of vehicle tax or that have a nil rate of Vehicle Excise Duty (VED).

The police and other enforcement agencies use the DVLA's online register to check that a vehicle has valid tax, so it's vital to ensure your correct details are aligned with your car. Automatic number plate recognition (ANPR) cameras will enforce the new system by catching motorists who have avoided payment.

Under the new rules, tax can no longer be transferred between vehicle owners. That means that when you, as the registered owner, sell a car, you will get a refund of any remaining full months of tax when you inform the DVLA that you no longer own it. There is no need to fill in a form to claim the refund. 

So if you are buying a car, you will need to get new vehicle tax in your name before you can drive it. You can tax the vehicle using the New Keeper Supplement (V5C/2) part of the vehicle registration certificate (V5C) online or by using an automated phone service. The number is 0300 123 4321 and the DVLA says it will be in operation 24 hours a day, seven days a week.

If you wish to make a Statutory Off-Road Notification (SORN) for your vehicle, you can apply online to do this using the 16-digit reference number from your vehicle tax renewal reminder (V11) or 11-digit reference number from your log book (V5C).

From November, motorists will also be able to pay for their vehicle tax via direct debit. That coincides with a new option to pay for car tax monthly, alongside the traditional six-month and 12-month options.

The new tax scheme has been criticised before it’s even been implemented, however, because the RAC estimates that switching to a paperless tax system could cost the UK Government up to £167 million. That far outstrips the £10 million worth of savings the DVLA says it will make with the new system.

The research also found that one in three people were unaware of the changes, and the DVLA has been criticised for not informing the public of its changes sooner.