The Sunday Times Driving Placeholder

News: Car tax changes could cost ignorant used car buyers dear (video)

Free car tax? No such thing…


Tax Check

USED CAR buyers are being warned about changes to road tax that could see them unintentionally falling foul of the law, and facing a possible fine of £1,000.

With the abolition of the paper road tax disc from October 1, it will no longer be possible for the registered keeper of a car they are selling to pass on any unexpired portion of road tax to the vehicle’s new owner. Instead, it will be up to the seller to apply for a refund for any full calendar months remaining.

However, a survey by money.co.uk, a price comparison website, found that ignorance of the changes to road tax is widespread among drivers. According to its study, fewer than half of drivers realise that the paper tax disc will be scrapped in October, while 6% believe the changes don’t come into effect until next year.

At present, 30% of people who sell their car, either to a dealer as a part-exchange or to a private buyer, do not apply to the DVLA for a refund of its unexpired tax. This means that thousands of new owners unaware of the changes to road tax but who believe they have bought a car with unexpired tax as part of the deal, could face additional, unbudgeted costs.

Motoring organisations have reacted angrily saying the change could cost used car buyers millions of pounds in fines and car tax.

Paul Watters, head of roads policy at the AA, said: “Vast numbers of people could be hit, as many car sales involve someone saying, ‘I’ve put tax on the car for you’.”

Without a tax disc to rely on as evidence of compliance, the DVLA will, from October 1, rely instead on its continuous registration system, under which a car must be taxed or, if it isn’t being driven, given a statutory off road notification (SORN). In addition, police using ANPR [automatic numberplate recognition] technology that crosschecks a vehicle’s numberplate against the DVLA’s electronic records, will enforce compliance on the roads.

The change will come into effect just as latest figures show that in 2013, road tax evasion fell to a second all-time low of 0.6% of all vehicles, equivalent to £35m in unpaid tax. However, this was a slight rise of 0.1% on 2012.

A spokesman for the DVLA said that continuous registration, in particular, was a very effective weapon in the fight against road tax evasion: “Our records mean we always know whether a car has road tax, and enable us to badger the keeper with warnings and fines until they pay. Road tax evasion has been falling since we introduced continuous registration in 2004 and in combination with ANPR technology we’re confident the trend will continue.”

He denied the agency had not done enough to alert drivers to the forthcoming changes.

To apply for a refund of unexpired road tax, click here.