The new car tax rules you need to know to avoid an £800 fine or having your car clamped
The DVLA introduced sweeping changes to car tax rules in October 2014, but new figures suggest that many motorists are unwittingly incurring fines as they are unaware of the changes.
Motorists no longer need to display a tax disk on their windscreen, but other modifications – such as the way vehicle tax is transferred when a car changes hands – has left many people confused.
Here, I will explain the new rules to help you avoid falling foul of the law, and keep unnecessary penalties at bay
* Drivers no longer receive a tax disc when they renew their vehicle tax – it is now all done electronically
What has changed?
In October 2014, vehicle tax went digital. Cars no longer need to display a tax disc and instead police cameras will automatically check a car’s licence plate to establish whether it has been paid.
Drivers also gained the ability to spread the cost of the tax by paying by monthly direct debit.
But the change that is catching people out is this. For decades, if a car changed ownership any remaining vehicle excise duty would be transferred as well.
Anyone selling a second-hand car could boast that it was ‘taxed and MOT’d’ until a certain date – it was one of the perks of buying second hand.
From October, the paid tax is automatically cancelled if a car changes hands – even if there is a valid tax disc in the window.
This means that the new owner must pay again. The former owner will automatically receive a refund of any full months of remaining paid tax.
Who will this affect?
Anyone who buys or sells a car or just changes the name to whom a car is registered.
All other drivers can continue to pay their car tax as usual – the only difference is they will no longer receive a tax disc and payment options are now more flexible.
The number of cars that have been clamped has rocketed by 60 per cent since the new rules came into force, from about 5,000 a month before the changes to 8,630 after.
The increase suggests drivers may be confused by the fact outstanding tax is cancelled, even if there is a seemingly valid tax disc in the car window.
- Golden rule: when you buy a vehicle, it will be untaxed until you tax it!