Road Tax Changes – What it all means to you

In October 2014 the way we paid and displayed our road tax changed forever. The days of carefully tearing the tax disk away from the sheet of paper it came attached to have gone, and some other things have changed too.

Display

Most people now know you don’t need to display a tax disk in the windscreen anymore, although there are still a lot of people who seem to be hanging on to an old tax disk holder. The authorities now use number plate recognition systems to check if your car is taxed so there is no need for the old visual check by the boys in blue. Even if you still had some months left on the tax disk it was all moved over to the non-display system so no money will have been lost.

Cost

Despite many concerns the initial costs did not change. The tax bands stayed the same and this meant that the transition went very smoothly. Since then however, there has been a budget and Mr Osborne has promised changes to costs in 2017.

Payment

The choice to pay for 6 months or a year are still in place. For a lot of people the 6 month option is far more affordable in the short term and it is great news this is still on offer. Those same people may be interested to find out you can now pay monthly too. The option to set up a direct debit is certainly a useful one for people who feel they might forget to pay. Sadly the only option that doesn’t carry any extra charges is the 12 month payment choice. The 6 month version carries a 10% charge and the monthly direct debit plan adds another 5% on top of that.

Selling Your Car

One very big change that has come in with the new road tax set up is the removal of tax being passed on with a car. No longer can you offer a car for sale with “6 months tax” and use this as a selling point. Once a car changes owner the tax is removed from that vehicle and is refunded to the previous owner. The new owner then has to tax the car immediately and from scratch. Some people don’t like this change but the refund system seems to be working well and the general feeling is that it all evens out in the end. Be sure to remember to tax any car that you buy right away though.

Tax Avoiders

The main aim of this new system was to save money on admin and make everything more modern. However, the DVLA always want to cut down on the number of people who avoid paying road tax at all. So far the early reports are suggesting the number of people not paying has actually gone up, a large part of this could be down to confusion about the system. The DVLA are sending out warning letters to people before action is being taken because of how new the system is. In time these letters are likely to be phased out and people who dodge road tax will be fined.