Death of tax discs

The humble paper tax disc, displayed on car windscreens for nearly 100 years, is being consigned to the history books, Chancellor George Osborne announced in his Autumn Statement today. Vehicle excise duty was introduced in 1889, and motorists have had to display the three-inch paper disc in the vehicles since 1921 in order to prove it was taxed. In the Autumn Statement, however, the Chancellor has announced an end to paper tax discs. [caption id="attachment_6545" align="aligncenter" width="504"]50's tax discs Tax discs from 1952-1955, courtesy of Flickr user Jerry “Woody”[/caption] Instead, motorists will just register their cars online, or at the Post Office or over the phone if they’re not online. Automatic Number Plate Recognition (ANPR) cameras will then identify those not taxed by checking registration numbers against a central electronic register. The move, planned to come into effect from next October, will save business £7million a year in administrative costs, according to the Treasury. A spokesperson said: “This is a visual symbol of how we are moving government into the modern age and making dealing with government more hassle free.” Under the new system, drivers will also be able to pay their car tax in monthly instalments via direct debit, rather than paying for a year or six months’ tax upfront. Paying for only six months at a time is roughly 10% more expensive than paying for the full year, but this is expected to be cut to 5%. Paying each month by direct debit is also expected to cost 5% more than paying for a year’s tax upfront.

Penalties

If you’re thinking that doing away with tax discs will result in more car tax evasion, you should know that the penalties for not taxing a vehicle remain the same. Also, ANPR cameras can read your number plate at speeds of up to 100mph, regardless of lighting or weather conditions. If your car is checked against the central register and isn’t taxed, you face an automatic fine of £80. You’ll also be liable for any tax arrears and could be the subject of a County Court Judgement, which will be recorded on your credit file and could cause you problems when obtaining credit in the future. Worse still, you could also face a fine of up to £1,000 and even court prosecution. At the moment, you can be fined a separate penalty of up to £200 for not clearly displaying your tax disc on your windscreen. Presumably this penalty will disappear with the discs themselves.

Exemptions

Not every car owner has to pay car tax. Disabled passenger carriers such as specially adapted minibuses and private vehicles used by disabled people are exempt, for example. Mobility scooters and powered wheel chairs with maximum speeds of up to 8mph are also exempt, as are tractors and other agricultural vehicles generally used off-road. Vehicles manufactured before January 1, 1973 have exempt status as ‘historic vehicles’. Electric vehicles powered by an external energy source, or electric storage batteries not connected to an external power source while moving are tax-free too. Finally, your vehicle’s CO2 emissions might also earn you exemption from road tax. Any vehicle that emits fewer than 100 grams of CO2 per kilometre (g/km) falls into tax Band A and is exempt from the duty. Of course if you don’t use a vehicle, you won’t have to pay car tax on it – as long as you’ve declared it as off the road with a Statutory Off-Road Notice (SORN). If you’re unsure about car tax and how to pay, check out Jess Bown’s blog on the matter, here. What do you think about George Osborne’s decision to do away with tax discs? Unstoppable march of digital progress, or easy ride for tax evaders? Sound off in the comments!    

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