DVLA stealth tax?
A DVLA spokesman says: “We continue to operate a comprehensive package of measures which make vehicle tax easy to pay but hard to avoid."

With the use of the sophisticated ANPR (automatic number plate recognition) systems linked to databases for vehicle registration and road tax, MOT and motor insurance available to the police and DVLA, the current road tax, MOT and insurance status of a car can be checked rapidly in a police patrol car, with an active roadside monitoring camera or by a DVLA compliance vehicle. The police and DVLA are then able to take prompt action where a car does not appear to have a current VED, MOT or motor insurance cover.

Cameras on DVLA vans can examine the registration of every vehicle they pass to check if the VED is current. (Photo credit: Times)
See report in the Times today. More

See our earlier NEWS items on these topics

Issues around the end of the tax disc rumble on. 150410 More

Driving a UK registered car in Mainland Europe - what evidence of current road tax do you need to carry? 150216 More

Applying for a tax class change from PLG to Historic and a NIL value VED
See our guide and flowchart. More

End of paper discs in October 2014 - FBHVC concerns. 140613 More

Beware the 5 day MID insurance database update risk! 140518 More

Updated: 150713 Posted: 150504
Reports in the Sunday Telegraph yesterday and in the Times today have highlighted again that the new road tax system introduced by DVLA in October 2014 when the paper disc ended is continuing to raise concerns for motorists.

First there is what is seen as a stealth tax - when a car is sold the road tax, even if it has many months to run, automatically expires with an automatic repayment by DVLA of the remaining complete months of road tax (but not any residue of the current month) to the seller but the new owner has to tax the vehicle again, including the month of purchase, with no period of grace before they can drive it.

The second concern is that many motorists are unaware that vehicle excise duty is automatically cancelled when a car is sold, a change that is exposing those drivers to the risk of clamping by the DVLA and large fines. While most motorists know that road tax discs are no longer required, what is catching out many is that vehicle excise duty is automatically cancelled if a car changes ownership – even if there is a valid tax disc in the window. Critics have described the new car tax rules as a bureaucratic nightmare.

Issues around the end of the tax disc rumble on - consequences seen by the FBHVC
In a NEWS item posted on the V8 website on 15th April 2015 we reproduced a report in a newsletter from the Federation of British Historic Vehicle Clubs (FBHVC) which highlighted unintended consequences from the new road tax system introduced by DVLA when the paper disc ended in October 2014. An important section from that FBHVC newsletter is reproduced below:

DVLA have consistently said, and we (FBHVC) have duly reported to you, that even if the vehicle is taxed on the date of sale, the sale causes that licence to lapse, a rebate is due to the seller and the buyer must himself tax the vehicle before he uses it. DVLA have said there is no 'grace period'. They point out that there are rapid ways of taxing the vehicle, whether online or by phone or at a Post Office. This advice is entirely correct for sales by motor traders or when the vehicle is not currently taxed or is on SORN.

We have looked long and hard at the law regarding this point and come to the conclusion that, in respect of most
sales between private individuals, this advice from DVLA is not actually correct. Our understanding of the legal position has been independently confirmed. If the vehicle is taxed at the time of sale, then the law (it is the Vehicle Registration and Excise Act 1994 as amended) says the VED will lapse when the vehicle is sold and the DVLA is notified of that fact. The only way the DVLA can be notified is by the existing Registered Keeper (the seller) posting the actual V5C to DVLA in Swansea. A private individual cannot do that electronically or by phone, the paper document must be sent. It is also clear that the seller's right to a refund does not arise before the V5C is in the hands of DVLA. Until then the licence is in force.

Now any wise buyer should assume the person who sells him the vehicle and hands him the V5C/2 will immediately put the V5C in the post. That is the legal requirement, and the seller will have a rebate to protect. But we think it is absolutely fair to say that where the vehicle is taxed at the time of sale and the seller is a private individual, a buyer cannot legally be obliged to apply for new VED until the V5C has arrived in Swansea, and that cannot be until the earliest time it could be delivered there by first class post. This could solve the problem of the evening or Sunday purchase, in respect of which the Post Office option, which some members would need to use, was never available, and also save taxing a vehicle which is to be immediately exported or for which SORN will immediately be declared, perhaps because it is heading for restoration. There are unlikely to be any consequences from acting upon our advice, as of course if a vehicle in the situation described is seen on the road, the DVLA database if checked will show it as taxed. Of course, if a buyer is able and wishes to ensure strict compliance with the DVLA advice then they can apply to tax the vehicle immediately online or by phone before driving the vehicle away as there is no reason not to do so.

See the complete NEWS report with this FBHVC newsletter item
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