As of October 1st, the car tax disc no longer has to be displayed in your windscreen and your car tax will no longer be transferable if you sell your car.

The car tax disc or vehicle excise duty was first introduced in 1921 and ever since then, it has been a legal requirement to have it on display.however, from October 1st, this all changes.Even if you have a car tax disc with remaining months to go before it expires, you will no longer be required to display it.

The DVLA, police and enforcement agencies will be using automatic number plate recognition cameras alongside an electronic vehicle register check to see wether a vehicle is taxed or not and will no longer have to rely on checking a paper tax disc.The DVLA have said that this is purely a cost cutting exercise that will eliminate both printing and postage costs and will save some ten million pounds per year.

There is a worry that motorists could unknowingly drive an untaxed vehicle such as hire car or a company pool car, however, the tax status of any vehicle can be checked online using the vehicle make and registration details.

The payment system is also changing.Currently, road tax is paid in advance in either a six month or annual lump sum with a 10% extra charge for the six month option.However, from October 1st, motorists will have the option of paying with direct debit for vehicle tax that starts on or after 1st November.The direct debit can be set up to be annual, every six months or monthly.For the six monthly or monthly options, there will be a 5% surcharge.

These changes will also have an effect when you come to sell your vehicle.Previously, it was the norm to sell your vehicle and state that it had "x" amount of MOT and "y" amount of tax remaining.This will no longer apply to the vehicle tax as it will no longer be transferable.Instead, the seller will get a refund for any full months of unused tax remaining whilst the buyer will not only have to insure the vehicle but tax it as well before being able to legally drive it away.This will be possible as the buyer will be able to use the "new keeper supplement"section of the V5.The buyer will be able to go online to the DVLA web site or use their 24 hour automated call service.It will still be possible to buy the tax in the Post Office.

The one possible down side is that if you sell your vehicle mid month, you will lose the remaining part of that months tax and the buyer will have to pay from the start of that month so, in effect, the vehicle tax has been paid twice for that month !