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21st December 2015

Vehicle tax rules misunderstood

One year on from the abolition of paper tax discs and a new survey from HPI has revealed that 45% of motorists don’t fully understand the new vehicle tax rules and are unwittingly committing tax evasion.

Seventeen per cent of drivers wrongly believe that although vehicle tax cannot be passed on, the new owner is given 14 days grace to purchase tax for the vehicle. A further 16% mistakenly assume that vehicle tax is transferred for the remainder of the month that they buy the car in. The remaining 12% of drivers believe that any remaining vehicle tax can be included in the sale of the vehicle and transferred to the new owner; however, this is not the case.

On 1 October 2014, the Driving Vehicle and Licensing Agency (DVLA) updated the rules on vehicle tax, meaning tax can no longer be passed on with a vehicle when selling, or transferring it. HPI’s findings show that many used car buyers still believe they can transfer tax or have ‘grace’ days to give them time to buy vehicle tax for their new car. Under the new rules, the buyer must get vehicle tax, before taking the vehicle on the road.

Neil Hodson, deputy managing director for CAP HPI, comments, ‘It’s worrying to think that as many as 45% of used car buyers don’t understand the new tax rules and could be driving around untaxed. This is a serious issue as driving a vehicle without tax may invalidate your motor insurance. Failure to tax vehicles can result in penalties through court prosecutions, wheel-clamping and/or the removal of your vehicle. Sellers could also face fines if they don’t inform the DVLA when they sell their vehicle.’

HPI is urging buyers to fully understand the rules that apply today; used car sellers are responsible for notifying the DVLA when they sell their vehicle which can now be done online.


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