Please note: the guidance in this article does not apply to drivers in Northern Ireland.
From 1 October 2014, the paper tax disc will no longer be used. A new electronic system will be implemented in its place.
Why has the system changed?
The changes will allegedly help streamline the service and save millions of pounds each year in admin costs.¹
Do I still have to pay road tax?
Yes, but you won’t have a paper tax disc after 1 October 2014.
What happens when my tax disc is due for renewal?
You will get a renewal notice in the post. This will invite you to pay online, over the phone or in the Post Office.²
What do I have to do in the meantime?
Nothing, as long as you’ve paid your road tax you just have to wait until your next renewal is due. You can take the tax disc out of your car from 1 October as the police will no longer be checking them.³
If I sell my car, can I transfer the tax disc with it?
No, under the new system you can’t do this. Drivers selling their car can no longer transfer the road tax when they sell the vehicle.⁴
Whoever buys your car will have to renew the car tax straight away. However, if you have months remaining on road tax, you will automatically get a refund for any full months left. You will only get this if you notify the DVLA of the car’s new owner.
How do I tell the DVLA my car has a new owner?
All the information you need is on the gov.uk site, here.
I’m planning to buy a second-hand car, what does this mean for me?
You need to be careful of any cars advertised as coming with several months’ remaining car tax. You will not be able to use this – you will have to renew the car tax as soon as you buy the car.⁵
Who is responsible for telling the DVLA about the new car’s owner?
The seller is responsible for notifying the DVLA of an ownership change. If they do not notify the DVLA, they will still be responsible for paying the tax and any related penalties.⁶
How much does car tax cost?
It depends on the size of your engine, the type of car you drive and when it was registered. Find the full list of rates here.
How can I pay?
You will still be able to pay 6 monthly and annually as before.
Plus, under the new scheme you will also be able to pay by direct debit (only available if you tax your car from 1 November onwards).⁷ However the monthly payment option will cost you an additional 5% on top of the total cost.⁸
If you choose to pay by direct debit, monthly payments will automatically continue until you tell the DVLA to stop taking them, providing there is a valid MOT on the car.⁹
Paying by credit card? Watch out for the £2.50 surcharge.¹⁰
What is the fine for driving without tax?
Drivers who fail to tax their car on time will face fines of up to £1,000.¹¹
How will the DVLA know if I haven’t paid my tax?
There will be regular electronic checks to verify which drivers have not paid their road tax.
For full details of the new scheme, visit the gov.uk website: https://www.gov.uk/government/news/vehicle-tax-changes.
    http://www.telegraph.co.uk/finance/personalfinance/insurance/motorinsurance/
  https://www.gov.uk/government/news/vehicle-tax-changes
  http://www.independent.co.uk/news/uk/home-news/vehicle-tax-changes-make-sure-you-
 http://www.chroniclelive.co.uk/news/local-news/tax-disc-changes-how-tax-7680140 .