Imminent Changes to Vehicle Road Tax

DVLA Road Tax Changes From 1st October 2014

On October  1st this year, the DVLA are introducing a raft of changes that will affect every car and motor vehicle user in the United Kingdom.

Amazingly, in a recent survey, only 40% of road users are aware or understand the changes, or have any idea how they will be affected.

Essentially, the first and most significant change will be that after 1st October 2014, no more Road Fund License Discs will be issued. The system will rely solely on the DVLA Electronic Database, so there will be no visual way to see if a vehicle is taxed, but Police etc will be able to instantly tell if a vehicle is taxed via this website.

This is where the major changes will come into play. When someone purchases a new vehicle, as of 1st  October 2014, you will not be able to purchase a new or used vehicle with Road Tax included, and it will be the responsibility of the seller to inform the DVLA that they are selling their vehicle. At this point, the DVLA will start the process to reimburse the keeper who is recorded on the DVLA V5 Registration Form with a refund on the remaining full months of Tax left on the vehicle. The new keeper also has to inform the DVLA at this point that they are the new keeper, and significantly, will have to Tax the vehicle from this point.

Further changes to the system will come into play on this date. One that the DVLA are keen to promote is that a new keeper will be able to pay for their Road Fund License on a Monthly Basis, rather than the traditional Annual or Bi Annual basis. They have reduced the subsidy of buying in less than yearly cycles from 10% to 5%. A new keeper will be able to Tax the vehicle by Internet, Phone or by the Traditional Method of using the Post Office, allowing a 24 Hour Option to Tax the vehicle upon purchase. The new keeper will also be able to change keeper using The V5c2 part of the Registration Document, previously known as the Green  Slip. This will have added benefits to help buyers, especially when changing a vehicle taxation class from Disabled to Petrol Car etc. Another improvement to the current system will be that if a new keeper taxes a vehicle via internet or phone, they will be able to Tax it from the next month 5 calendar days from the end of the month. Taxing at the Post Office will still only allow taxation for the next working Month 2 Working Days from the end of the month at this point. But this will help allow a change of ownership to take place near a month end with the Previous Keeper managing to be reimbursed from the end of the current month, but not losing out on either purchase or sale. This important change has not been particularly well documented or advertised by the DVLA,

There are obviously some negatives to this new system, but the DVLA has been quite clever in ensuring that the Voting Public don’t take the brunt of this! At present, there are thousands of cars available for sale on dealer’s forecourts with valid Road Tax still in force. In most cases the Motor Dealer has purchased and based his valuation of the vehicle including this Road Tax, and has been able to pass this on to the new keeper. From 1st October, if the dealer has not sold it to a new keeper prior to this date, the remaining road tax will become void and invalid, and will not be transferable. This creates 2 scenarios. Firstly, there are some big advantages to people purchasing these cars before the October deadline, as they will be able to benefit from the remaining road tax for free, meaning they will not have the added expense of purchasing road tax on top of everything else involved in the purchase all at once. Secondly, most Motor Dealers feel duped by the DVLA because of this new rule, and consensus of opinion on the Twitter Motor Dealers Forum is that they would probably prefer to make slightly less profit on a vehicle sale and sell it in September and let the customer have the benefit of the remaining Road Tax, than just hand it over to the Government Coffers! In short, a Win/Win for the consumer!

If you have any concerns or questions on this new system the DVLA are planning to run another webchat on the week commencing 14th September, alternatively please feel free to contact me and I will endeavour to answer any questions for you.

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