The tax disc changeover. How will it affect you?


Written by: David Collings

Has it escaped your attention that 1st October is one of those watersheds for dealers? 

If you’ve no idea what I’m talking about, the DVLA is scrapping the paper system of tax discs and replacing this with an electronic system on 1 October. 

DVLA tells us they’ve been in touch with more than 6,000 stakeholders and commercial customers about what’s going to happen in less than one week, but when Philip Nothard, our Retail Editor and resident expert and I sat down to discuss this with our customers, big questions still remained.

There’s no doubt the motorist, who DVLA is only contacting when they have a need to re tax their own car, will seek solace in your advice. You’re the experts and they’ll expect you to have all the answers, but do you have them?

There’s no doubt there are positives. The DVLA is bringing the system kicking and screaming into the 21st century. If you’ve bought a tax disc online for your own vehicle you’ll see how things have improved and it’s clear that DVLA have thought long and hard about this, but the stark reality is that you WILL have to work out a new process to deal with digitisation and you WILL have to amend how you work.

Fail to do this and you could find yourself on the wrong side of the rules come 1st October.

Here are the top five issues you should get your heads around: 

When is a vehicle not a taxed vehicle?

From 1st October, as soon as a registered keeper informs DVLA of the sale of the vehicle, the keeper will receive an automatic refund of any unused monthly tax. This is a quick process with minimum delay. As soon as this happens, that vehicle is classed as being untaxed and is not allowed on the road. This will have an impact on how you run your business. 

Potentially every vehicle on your forecourt will be untaxed. If you wish to tax a vehicle to run it whilst it’s on sale you MUST register that vehicle (you can’t tax a car in any other name other than your own or your businesses). That means you’ll be adding another named keeper to the V5c. 

This new process has financial implications too, especially for those on the cheaper end of the market (the old taxed and tested runners). For example, you can’t make the tax disc part of the deal and if you do decide to tax the vehicle you’ll have to pay for it, the days of making use of ‘remaining tax’ are gone.

If you don’t want to register the car, but want to run it on the roads the only way to do this is using trade plates. DVLA has not changed the use and policies surrounding trade plates, other than the need to have a ‘triangle’ disc attached to them. 

A word on SORN. If the vehicle is registered as ‘in the trade’ AND kept on private land, then a SORN is not required. A SORN is only applicable to a registered keeper who is in possession of a vehicle.

How do I tell if a vehicle is taxed and what are the implications?

The motorist will no longer need to display a tax disc in his windscreen, so the only way to check a vehicle has tax (eg for aftersales departments) is to use the DVLA online Vehicle Enquiry System. It’s web-based so you need to have access to the internet. You’ll need to make a separate enquiry (no bulk inputs) for each vehicle you’re questioning. 

Responsibility to tax a vehicle rests with the owner, however, you should make it your responsibility to ensure you are satisfied that any vehicle you touch has tax or trade plates if you intend to take any vehicle on the road. Don’t rely on your customer’s word, check it out or plate it up.

Checking via the Vehicle Enquiry System is easy but be warned, it could add more time to your process and you’ll need to ensure you have resource in place. You should review your process with this in mind and understand what you need to do to accommodate this. The online system is already in place so you can test it now. 

The one exception is where an untaxed vehicle is being driven to an MOT testing centre, however, the MOT test MUST have been pre-booked for it to remain legal and you need to be able to prove this is the case. If you have any doubt you should look to invest in some trade plates if you have not already done so.

There are five events that will trigger an immediate automatic refund of tax, all of which will go to the registered keeper: 

  • Vehicle has been sold or transferred 
  • Vehicle has been scrapped at an authorised treatment facility
  • Vehicle has been exported 
  • Vehicle has been removed from the road and the person on the vehicle register has made a Statutory Off Road Notification (SORN)
  • The tax class on the vehicle has changed to an exempt duty tax class

Is the tax process easier or will this new process slow things up?

This is difficult to quantify because everyone has their own business model. However, everyone should check their processes and realign where necessary. 

In making these changes DVLA is trying to ease the pressure. The online system is simple to use and a vehicle can be taxed immediately even when there is a change of keeper. 

You can ring DVLA at any time, day or night, (using the new keeper supplement of the log book to tax the vehicle), on 0300 123 4321. It’s an automated system, takes a couple of minutes and is charged at local rate. You can also go online to tax a vehicle. You can pay either by debit card or credit card, or there’s the Post Office.

It’s worth noting that if you pay by credit card you’ll be hit by a £2.50 charge every time you make a transaction. Not great for corporate credit cards. Debit cards don’t suffer the same financial penalty, but if you think a debit card is the answer just be sure you’ll always have enough funds in the account to avoid any nasty surprises. Potentially, another change to your process and time taken getting a new card from the bank or building society.

Direct debit will become available but DVLA tells us this won’t be ready until 1st November. Lastly on this topic, be aware that the online facility to register a change of keeper will is also not available just yet. DVLA is working on this. 

What about the blue V5Cs are they still valid? 

Yes they are, as long as they’re the latest version. DVLA do recommended that you apply for a new one, but in reality, some dealers say they don’t have the time to apply for new logbooks which can take weeks to come, plus you’re simply adding another owner on there. DVLA recommend that if you don’t have time, wait until you sell the vehicle, enter the new keeper details on the document and use it to tax at the Post Office 

The thorny issue of cherished plate transfers (CT)

At the time of writing we’re still not clear on the full ‘tax’ and cost impact there will be for CTs. 

DVLA tells us the introduction of the Continuous Insurance Enforcement law means there is no need to check insurance when taxing a vehicle (because the system automatically checks to see if a car is insured). 

Further that the new vehicle must be taxed before the application for a cherished transfer is submitted. This can be done online, by phone or at a Post Office branch using the new keepers supplement V5C/2.

However, some questions remain unanswered. Once we’re confident that there is a clear response we’ll relay this to everyone, in the meantime, feel free to open up question or debate in our CAP Community section on CAP Extras.

We’ve uploaded some transcripts of conversations between dealers and DVLA so you can see what others have been asking about (click buttons below).

DVLA has also offered this link:, which will answer more of your questions.

Abolition of the Tax Disk

Trade Plates FAQs

DVLA Webchat part1

DVLA Webchat part2