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As end of the tax disc age catches out motorists: The new car tax rules you need to know to avoid an £800 fine or having your car clamped

14th April 2015 Help & Advice Tags: , 0 Comments


The DVLA introduced sweeping changes to car tax rules last October, 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, we explain the new rules to help you avoid falling foul of the law, and keep unnecessary penalties at bay.

What has changed?

In October last year, 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.

What happens if you’re caught out?

The DVLA says it is writing to all buyers of vehicles to let them know they must pay the tax. If it isn’t paid, it also sends out a reminder.

If you fail to pay the tax, your car will be clamped and you’ll have to pay a substantial release fee to get it back.

The government website has more information.

To release an untaxed vehicle that has been clamped a fee of £100 must be paid. In addition, the vehicle must be taxed or a surety of £160 for a car or motorcycle must be paid before the vehicle can be released. The surety payment is forfeited if the keeper does not show the vehicle has been taxed within 2 weeks. This may be done at the nearest car pound.

If the vehicle is not released within 24 hours it is impounded and the release fee increases to £200.

There is a £21 per day storage charge as well as the requirement to tax the vehicle or make a surety payment. This must be done at the car pound where the vehicle is being stored. The motorist would need to call NSL on 0843 224 1999 to find out which car pound this would be.

If the necessary release and storage fees are not paid, DVLA could dispose of the vehicle after it has been in the car pound for seven days.

Christopher and Marianna Webb, from Bridport, Dorset, were hit with an £822 bill to get their Ford Focus back after returning from holiday to find it had been impounded for non-payment of vehicle excise duty.

The couple had decided to swap their cars with each other and informed the DVLA of the change in ownership, without realising it meant the tax for both vehicles would be cancelled.

What can you do if you’ve been stung?

There is no formal appeals process so it is more than likely drivers caught out will simply have to pay up. However the DVLA told This is Money that it would consider any evidence motorists wish to provide in mitigation against a fine on a case by case basis.

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