New Vehicle Tax Rules from October 2014

21st January 2014

New Vehicle Tax Rules from October 2014

The days when you see a For Sale advert for a car or motorcycle with '6 months tax' are shortly to end.  It was always a bonus when buying a used vehicle to get a few months tax but as from October vehicle tax will no longer carry over to the next owner.

With the removal of the paper tax discs from October 2014, the automatic transfer of vehicle tax when you purchase a vehicle will also cease.  So when you buy a vehicle you will have to buy new road fund tax whether there is any leftover from the previous owner or not.

The ‘Draft Clauses and Explanatory Notes’ for the proposed Finance Bill 2014 say:

“…it will no longer be possible to transfer the benefit of a vehicle licence when there is a change of registered keeper. As a consequence of this, where there is a new registered keeper he/she will be obliged to take out a new vehicle licence when the vehicle to which the vehicle licence relates is transferred to him/her. The reason for now preventing vehicle licences being transferred from registered keeper to registered keeper is to avoid a new registered keeper unknowingly keeping an unlicensed vehicle. For example, in the absence of a paper licence a vehicle may be purchased supposedly with the benefit of a vehicle licence. The new keeper would believe that the vehicle was licensed, but the former keeper could apply for a refund of VED without the knowledge of the new keeper resulting on the new keeper having an unlicensed vehicle.”

The powers that be say that this is to stop fraudsters, but this interesting twist in the rules means a nice windfall for the Treasury.  Since you can only get a refund for complete remaining months, the government stands to get a lot of partial months of extra tax revenue!  Then there's always going to be those people who forget, down get round to it or just can't be bothered to apply for a refund.

So whilst the reasoning behind the new vehicle tax rules make a little sense, there will definitely be some extra pennies going into the government coffers, with the closure of the local DVLA branches and no printing and supplying paper tax discs it will all add up.

Who knows, maybe we will see less pot holes and improved roads with all that extra money! It would make life a bit safer for us motorcyclists.

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