Digital Transformation

Govt scraps tax disc in latest paperless push

The government is to consign cars’ paper tax discs to history, the chancellor announced today.

Displaying a paper tax disc on your car’s windscreen will soon be a thing of the past, the treasury has announced – making vehicle excise duty (VED) the latest government function to go paperless.

In his Autumn Statement today (December 5th), chancellor George Osborne said the paper discs will be retired in October 2014 – almost a century after they were first introduced in 1921.

They’ll be replaced with an electronic system, allowing motorists to pay road tax online by way of direct debit. Those without internet access will be able to tax their cars in person at a post office, or over the phone.

Vehicle’s tax statuses are already stored in an online database, so the paper discs already play a much smaller role than when they served as the only form of proof that a driver had paid VED. 

By switching to the electronic system full time, the Driver and Vehicle Licensing Agency will probably cut costs and have a far easier time identifying fraudsters. That said, Treasury officials believe those who use Britain’s roads will benefit too – they anticipate that consigning the discs to history will save fleet operators £7 million in administrative costs per year.

A spokesperson for the ministry said: "This is a visual symbol of how we are moving government into the modern age and making dealing with government more hassle-free."

Indeed, the news that tax discs will be scrapped is the latest in a long line of announcements regarding the government’s push to go paperless. Last week, HM Revenue and Customs (HMRC) published plans to bring paperless Self Assessment (SA) a step closer to reality.

The majority of Britons required to complete SA tax returns do so over the internet, but HMRC is still required by law to send correspondence through the post. This means just 25 per cent of these taxpayers’ interactions with the department actually take place online.

Under the new plans, legislative changes will be made so that the whole SA process can be carried out paperlessly – delivering, according to exchequer secretary David Gauke, "the tax system for the 21st century that taxpayers expect".