By in Personal

I am now paying my road tax by direct debit

If you are not in the UK you may want to skip this post since it only applies here, but I thought I would share my experiences of the new UK road tax system that allows you to pay by direct debit.

I was probably one of the first people to use the new online tax system when it went live on the first of October last year because I bought my first car on the second of October and under the new law the tax that was on it could no longer be transferred to me so I had to buy new tax. At that time the direct debit system was not up and running and I just paid for my tax up front with my credit card.

If you have been following my posts you know that six months ago I had to get another car which I bought without the V5 (registration documents), again under the new law I had to tax it when I bought it so I filled in a form to apply for the V5 and bought the tax there and then as you cannot use the direct debit system if you don't have a V5 or a V11 tax reminder form.

My road tax reminder came in a few days ago and I haven't gotten round to renewing it yet. Since it has to be done by the end of the month and I had some free time today I decided now was a good time. After scrapping my last car and only getting back a fraction of the tax I was owed I had decided to pay by direct debit meaning that I am never going to be owed money back if I do get rid of the car, I will call them and stop the direct debit or transfer it to my new car, if I get one.

I have to say, given all the problem they had with the online system when it first came out (I had major problems with it myself the first day) I was a little sceptical. However it was really easy to do. I just gave my reference number, confirmed the details of my car and entered my payment details. I received a confirmation email within ten minutes telling me when my payments would start and giving me a full breakdown of the dates payment would be taken. The only downside I can see is that you cannot choose a payment date, it must be the first of the month so that your car is taxed as the previous months payment would run out on the last day of the previous month. I hope this is something they change in future as many people don't get paid around that time and it may be difficult for them to pay on that date. Surely if its paid the same date every month then the tax is paid for a month, regardless of which date it is and doesn't run out till the same date of the next month?

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MegL wrote on April 26, 2015, 3:52 PM

That sounds like a good idea but too sensible!

melody23 wrote on April 26, 2015, 3:54 PM

Yes and no. It used to be that the tax was on the car so if you bought a car that had some tax left on it you inherited the tax, but in October last year they changed it so that if you buy a car you can no longer inherit the tax and have to buy new tax, so the tax is sort of still on the car, but more so on the owner of the car now. Its a total money making scheme because they only refund full months so if you sold me your car on the second of april you wouldn't get any money back for april but I would have to buy tax for april too so the tax is paid twice for the same month. It also always runs to the end of the month no matter what date you buy it on so if I bought a car tomorrow I would still pay for all of april. I got a lot less back on my old car than I should have done because it took the DVLA (our equivalent of the DMV) ages to take my name off the car.

MegL wrote on April 26, 2015, 3:54 PM

It was originally meant to cover the cost of roads but later governments just used it as another tax but purely on motorists.

melody23 wrote on April 26, 2015, 4:11 PM

Plus, council tax pays for roads allegedly anyway. I always find it odd that roads are being paid for twice, yet you wont find a single one without potholes or otherwise in need of repair. Oh and now that its related directly to your cars co2 emissions, people with zero emission cars don't pay anything at all, yet I still have to pay to use the road along with millions of other people who cant afford or simply don't want one of these eco friendly cars. Between Road Tax, Council Tax, tax on insurance premiums and the ridiculous amount of tax on fuel we are paying a ridiculous amount of tax to drive on the roads.

melody23 wrote on April 26, 2015, 4:23 PM

Its such a confusing system and that's just the tax, never mind the MOT and insurance which are nightmares in their own right. You cant have one without the other, but you must have all three. So your car must have an MOT (a yearly test for cars over three years old that proves its roadworthy, allegedly) before you can buy tax for it or insure it, but you cant even have your car parked on the road without tax and insurance. So if your car fails its MOT (and you are daft enough to also have your tax and insurance due at the same time) you cant even park it on the road because you wouldn't be able to insure or tax it until it had a valid MOT. Of course you can buy insurance and tax the day before your MOT and its still valid if your car fails but you cant drive the car because its not roadworthy. With the new law meaning you have to buy tax when you buy the car, your insurance and tax will be due at the same time every year, just to further complicate things. Technically speaking if you buy a car you should tax and insure it before you even drive it home.

Soonerdad3 wrote on April 26, 2015, 4:41 PM

If I am understanding this correctly, it sounds a lot like what we call a license tag for our cars here in the U.S. We have to pay this every year and get a small year tag to put on the license plate.

melody23 wrote on April 26, 2015, 4:47 PM

It does sound like the same thing, we used to get a 'tax disk' to display on our windscreen but with the new system they scrapped them the data is all held electronically now

Soonerdad3 wrote on April 26, 2015, 4:49 PM

Makes a lot of sense to take advantage of technology to make it more convenient.