All motor traders are in for big changes on October 1st 2014, when the paper tax disc will be replaced by a new online system.
The Driving Vehicle and Licensing Agency have introduced the changes as both a way to try and cut down on administration costs, and try to streamline car tax registration; which is in turn, hoped will help clamp down on tax-dodging vehicles.
What does it mean for Motor Traders?
The main point for business owners to remember is that tax discs will not be transferable when a vehicle is sold. So whether you’re a dealer or part time mechanic earning a bit of extra cash; if you’re selling a car on you’ll need to ensure you register the car online to pay the Vehicle Excise Duty.
Dealers will still be able to use trade plates however, instead of applying for new road tax, providing the vehicle is used within the conditions of the trade plate.
The change is thought to be likely to affect motor traders more than anyone, as used car sellers in particular will need to be particularly responsible when it comes to paying their road tax.
Dealers will need to fill out a V5C form to inform the DVLA whenever they sell a vehicle in order to ensure the relevant steps are taken to arrange road tax. However, there is the option of a refund for any outstanding full calendar months remaining on the existing tax, so all is not lost.
What the experts say
Motor Trade Insurance brokers, Unicom say that although it will be a new way of working for a lot of people, the changes should update road tax by bringing it up to date with modern technology:
‘Although it is perceived as an inconvenience adapting to the new online system, the benefits are great. It will mean that road tax can be paid by Direct Debit, for a start, so that there’s less chance of you forgetting to pay it. It can also be done over the phone, or paid in at your local post office, however, so don’t fear if you’re not that confident using a computer’.
‘Similarly, we see people approaching insurance in the same way. There are people who question ‘do I need motor trade insurance?’ because they see it as a faff. However, because it too has evolved into an online application, it gives people more incentive to protect themselves more conveniently, and therefore their business benefits in being covered for damage, loss and theft, etc’.
The penalties for not paying road tax
So it is worth putting in the time as a motor trader to make yourself aware of the changes on October 1st – as it Is a vital change that will undoubtedly impact the motor trades directly.
There will be a £1000 fine for those who don’t comply, as well as number plate recognition cameras that will be in action to spot any vehicles that don’t register – and any dealers who fail to do so will also shoot themselves in the foot; as they will effectively be making themselves liable for vehicle tax on a car they don’t own anymore.
Sellers should not assume buyers will take care of their road tax, and should take responsibility themselves as the seller.
And for cars that are scrapped they should also always apply for a Certificate of Destruction from an authorised treatment facility. Basically, dealers should think of the system as helping them to be better organised and have everything in its place so to speak. It should then in the long run help them run their businesses more smoothly without any mishaps due to forgetting to pay their road tax.
September 2, 2014