Car tax disc to be axed after 93 years

Car tax disc displayed in windscreen

The tax disc to show motorists have paid vehicle excise duty is to be replaced with an electronic system, Chancellor George Osborne has announced in his Autumn Statement.

The disc was introduced in 1921 but officials say it is no longer needed with the DVLA and police now relying on an electronic register.

The new system will allow people to pay the charge by monthly direct debit.

The Treasury said it showed government was moving "into the modern age".

It would also make "dealing with government more hassle free", a spokesman added.

At present, motorists are able to choose whether they pay VED in twelve or six month instalments.


Frankly, this change won't make a great deal of difference to most drivers, apart from removing a little bit of admin from their lives. (Yes, I do know that some people have a sentimental attachment to that small disc in the window that is usually a bit torn from trying to remove it from its perforations).

Just like now, you'll still be able to buy it online and at the Post Office, you just won't get a physical disc. You'll still get a reminder in the post a few weeks before it runs out. And you'll be able to check how long you've got left online too.

For the first time you'll also be able to pay by direct debit, for an extra 5% administration fee.

The fact is that the majority of tax evaders are caught using police cameras that automatically check your number plate, rather than someone actually looking in your window. Around 44m tax discs were issued last year. It's thought around a 800,000 people were caught driving without paying.

The latter option costs 10% extra each year, but this is expected to be cut to 5%.

The new option of paying by monthly direct debit is also expected to cost 5% more than paying for a full year in one go.

The changes are expected to come into effect in October 2014.

In the 2012 Budget, the government announced its intention to bring in a direct debit system for paying VED and said it would seek the views of motoring groups on the merits of such a change.

It also said it would "consider whether to reform VED over the medium term".

A spokesman for the Driver and Vehicle Licensing Agency (DVLA) said the body received approximately 160,000 reports from members of the public of potentially untaxed vehicles last year.

200,000 drivers in all were spotted having not paid VED last year, by the public or by the authorities - or by both, he added.

The DVLA also took action against 600,000 drivers whose non-compliance was revealed by analysis of its records, he said.

Origin of car tax: Commons in 1888

Chancellor George Goschen: Apart from the Carriage Tax, which is a tax mainly on the more luxurious carriages - carriages, used for pleasure - there is at present no tax on any other vehicles, however much they may destroy the roads.

We propose to put a duty of £1 a-year upon every vehicle exceeding 10 cwt. in weight, a very moderate limit to take.

Members will acknowledge that the principle that all those who use the roads should pay for them, and should pay in some proportion to the wear and tear that they cause, is just. But I have not yet exhausted the subject. We propose, also, to put a very small Wheel Tax upon every vehicle.

Colonel Nolan, MP for Galway North: Not on carts?

Chancellor Goschen: Yes. We propose a duty of 2s. 6d. per wheel upon all carts over 2 cwt.

Colonel Nolan: Oh!

"Evasion is estimated at 0.6% - the second lowest figure ever," he concluded.

On Twitter, presenter of BBC Radio 4's Money Box Paul Lewis wondered how prospective buyers of second-hand cars would know in future when the vehicle excise duty paid would expire.

"How will people tell if [a] vehicle's been abandoned?" he added.

After the demise of the paper disc, the Telegraph's Steve Hawkes said, enforcing the digital system would entail greater use of surveillance cameras.

"More personal data lodged and presumably sold on then," he commented.

Vehicle tax was introduced in the 1888 Budget and the system of excise duty applying specifically to motor vehicles was introduced with the Roads Act 1920, with the tax disc appearing the following year.


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Autumn Statement 2013

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  • rate this

    Comment number 1301.

    What a load of old tosh. Why not simply get rid of the tax altogether & add an appropriate amount to the price of fuel? It's a fairer way to tax road users, and gets rid of the infrastructure required to collect the tax. I cannot for the life of me understand why they persist in this outmoded vehicle.

  • rate this

    Comment number 1300.

    Paying monthly by Direct Debit is a brilliant idea, helps those of us who don't have huge incomes to spread the cost and not suddenly panic every 6 or 12 months about finding the money to pay it all in one go....

    Tax Discs don't prove you've paid it....I see loads of cars without up to date discs, yet when I check the taxis paid...just not bothered to put relevant disc on view.

  • rate this

    Comment number 1299.

    1295 Richard A.

    If you hire a car, why do you care whether it's taxed?

    It's not your responsibility to tax it, but that of the owner.

    They will be prosecuted if it isn't taxed, not you.

  • rate this

    Comment number 1298.

    In Guernsey (and Jersey, I think), the road tax is levied on fuel. There is a requirement to display an insurance disc (which is square!) in the windscreen. Police still have to check windscreens for the disc and its validity. Then again, we don't have the national databases and most Policing is done in person.

  • rate this

    Comment number 1297.

    1282. annieavatar
    Data collection by government on a grand scale

    If you think the government don't know what's in your bank already, that's very naive. They may not be picking you out, but if they wanted to pick you out they could find what's in your account quite easily, without breaking any laws.

    I know only little about this and the government have lots of access to accounts

  • rate this

    Comment number 1296.

    1288.Michael Lloyd
    Yes, you can remove it. Try to think out of the box. Yes, there has to be a "circulation tax". That does not mean it cannot be part of another tax, just that it must be identifiable. Thats not beyond the whit of man, so lets just include it in Fuel Duty as a percentage. Job done. VED now part of fuel purchase.

  • rate this

    Comment number 1295.

    I agree with MikeG - Put road tax on fuel so it is self collecting and related to road use. Substitute the road tax disc with an insurance disk so that we can get rid of more uninsured vehicles.
    As far as this new system is concerned - if I hire or buy a car how do I know it is taxed? What happens to the 160,000 dodgers reported by members of the public last year when there are not enough police?

  • rate this

    Comment number 1294.

    I just bought 20,000 tax disc holders, cheap, from a bloke in London, did he know something???

  • rate this

    Comment number 1293.

    @1273.Briot "I can see the logic of this, but DVLA will need to provide an online service which will indicate to a prospective purchaser whether a vehicle is currently taxed....."

    You mean like this one that has been publically available for several years?

  • rate this

    Comment number 1292.


    'Why not make it even simpler - when you buy insurance, you buy road tax, and the insurance co send you a number plate valid for that year colour coded so everyone knows you have insurance (and road tax).'

    You miss the point. There is no longer any need for any visible indication on the vehicle. The info is all held centrally and the Police can access it at any time.

  • rate this

    Comment number 1291.

    How will I know when buying a second hand car privately that it is taxed ? Up to now I could tell by the tax disc that it was taxed and for how long. A car now with a tax disc has a MOT done within the last year reassuring that it is not a total wreck .

  • rate this

    Comment number 1290.

    1273. Briot
    "DVLA will need to provide an online service which will indicate to a prospective purchaser whether a vehicle is currently taxed."

    They do and have done for some time -


    click on vehicle enquiry, enter registration.

  • rate this

    Comment number 1289.

    What I would like to know is why it took so long to scrap them? They where a visible means for police officers etc to enforce the law by checking a vehicle had a right to be on the road. With reactive policing and no police officers visibly enforcing the law they have been pointless for years....

  • rate this

    Comment number 1288.

    Alaric the Visigoth
    Oh, right. Despite the fact this tax pre-dates the EU by several decades, it's all the EU's fault!"

    Read it again - the EU NOW requires imposition of a circulation tax, which is why WE cannot remove it. It's their requirement that our Gov. quotes to keep it in place even though VED started in 1937. Got it now? The creation of VED was NOT the EU's fault - obviously!

  • rate this

    Comment number 1287.

    and the band played on and on and on. Remind me is there something in the dim distant past that goes......If it works don't fix it?

  • rate this

    Comment number 1286.

    Why not make it even simpler - when you buy insurance, you buy road tax, and the insurance co send you a number plate valid for that year colour coded so everyone knows you have insurance (and road tax).

  • rate this

    Comment number 1285.


    'NOT ANOTHER ONE ...... is there anything other than food that i can walk into a shop and pay for with money...'

    Yes, you can go to your Post Office, fivers grasped in hand, and say: 'Good Morning, I wish to tax my car please'.

    You'll sound a bit Monty Pythonesque, but no-one's stopping you.

  • rate this

    Comment number 1284.

    I seem to remember being told by a policeman that they catch criminals quite often just because they haven't bought a tax disc. Putting up the price of petrol would not catch dumb crooks.

  • rate this

    Comment number 1283.

    I like having a tax disk, but I understand the reasons why they want to do this, it makes financial sense.
    But if they could ring-fence the money and use it to fix the roads, that would be even better! I am fed up of having to avoid pot holes, and drive over ripped up tarmac..
    I expect the extra wear on my tyres costs per year is more than the tax!

  • rate this

    Comment number 1282.

    Data collection by government on a grand scale

    Banks making even more money off us for issuing direct debits (Nice one George)

    Excuse for fitting future cars with microchips that will be able to track us, could be used for road, tolls, speeding etc.

    Nice little totalitarian start to much more control of the citizens of the UK that will lead us down that road of human micro chipping.

    You wait..


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