Many drivers unaware that tax discs are being phased out

Nearly half of UK drivers are completely unaware that in-car tax discs are being abolished from October, according to research by money.co.uk.

Despite the death of the paper tax disc after 93 years on UK windscreens, all cars will still need to be taxed for use on the road. The penalty for drivers who do not have a valid tax disc will stand at a substantial £1,000 when the new setup comes into force in less than six weeks.

Of those drivers who are aware of the changes, 50 per cent do not know the exact date this will take place, with six per cent believing that it will happen some time in the next year. A further seven per cent do not know what the changes will be, while 32 per cent are not planning to do anything to find out what the changes are.

Another significant change is that tax discs will no longer be transferable when owners come to sell on their vehicle. Those selling a car will now be able to receive a refund for any full months of road tax remaining, while those buying a car will have to get new road tax for the vehicle before driving it away. If the seller does not inform the DVLA of the change of ownership they could face steep fines and remain responsible for taxing the vehicle.

A new direct debit option will be available, with 53 per cent of drivers claiming that they will use this option, even though there is an additional five per cent charge for paying monthly or biannually. This extra charge is half the current premium added to the prices for six months of road tax, which 23 per cent of drivers currently opt for. Meanwhile, paying by credit card will incur a £2.50 surcharge.

Hannah Maundrell, editor in chief of money.co.uk, says: "Changes to the vehicle tax system are no bad thing and we fully welcome the introduction of direct debit payments. It will also help to eliminate the problem of people who genuinely forget to renew their tax and end up being stung with a hefty fine. However, I suspect the new system may experience some teething problems so drivers really need to make sure they're on top of their game.

"Just because you don't have to display a tax disc doesn't mean you can get away with not paying it, if anything you're more likely to be caught now than before. This is particularly an issue if you are buying or selling a vehicle."