As many of our breakdown repair insurance customers will know, the old tax disc will soon be no more. But do you understand how the new Vehicle Excise Duty system will operate? Here we've broken the key information down into 8 bite-size points…

  1. The paper form tax disc will cease to exist from October 1st 2014, to be replaced by a new electronic system.

  2. Cars must now be registered online in order to pay Vehicle Excise Duty – or road tax.

  3. Payment can be made on the DVLA website, or at any Post Office.

  4. Number plate recognition systems will catch those who have not paid the tax.

  5. Driving an untaxed vehicle (one that has not been registered as officially 'off the road') could attract an £80 fine.

  6. Those buying a used car will no longer be able to enjoy any unused VED; remaining tax will no longer be transferred with the vehicle, but be refunded back to the seller (based on any remaining whole months). Used car buyers would therefore need to renew their tax as soon as they purchase the vehicle.

  7. Sellers of used cars must tell the DVLA about the change in ownership using a V5C form. If they fail to do so they may face a £1,000 fine.

  8. Some insurers have said that the new system will prevent road tax evasion, which may in turn reduce premiums

By Craig Hindmarsh