Road Tax regulation changes – how this has impacted on Motor Traders

Following on from the amendment to the Vehicle Excise and Registration Act (1994) last October, we look at how these changes in Road Tax regulations have affected Motor Traders.

Effective 1st October 2014, drivers are no longer required to display a paper tax disc in their windscreens. The change also means that when buying or selling a vehicle, the road tax is no longer transferrable with the vehicle.

Police rely on records held on a central DVLA database and use their Automatic Number Plate Recognition (ANPR) cameras to monitor this, so please be aware that when a vehicle changes hands, vehicle tax must also be obtained.

NEW ROAD TAX REGULATIONS

Buying A Vehicle

There will no longer be any valid road tax on any vehicle you buy or accept as part exchange. The vehicle tax will not be transferred with the vehicle and the new keeper will need to tax the vehicle before it can be used.

Selling A Vehicle

The seller of a vehicle can no longer transfer any unexpired period of road tax to the buyer. Once notified, the DVLA will provide a refund for any unused full calendar months left to the person on the DVLA vehicle register.

Vehicle Demonstrations

A trade plate will need to be used if driving an unlicensed stock vehicle on an 'accompanied' test drive.

Unlicensed Stock Vehicles

You can drive these using your trade plates but only for business purposes in accordance with the conditions of use. In reality what this means for businesses who sell new or used vehicles is that you will now need a set of trade plate licenses to be able to offer any demonstration of your unlicensed vehicle sales stock to prospective purchasers unless you register and tax the vehicles that you intend to sell.

Accompanied Demonstration

You can still provide accompanied demonstration of unlicensed sales stock vehicles to prospective customers using your trade plate licence, provided your insurance is extended to include accompanied demonstration cover.

Unaccompanied Demonstration

Can only be offered on licensed vehicles provided your insurance is extended to include unaccompanied demonstration cover.

Personal Use Of Stock Vehicles

You will no longer be able to use sales stock vehicles for your own business or pleasure purposes unless the vehicle has been registered and taxed by your business, subject to you having personal use on your motor trade policy.

Road Testing Vehicles Following Service Or Repair

Motor traders can check with the customer or the government vehicle tax site (we’ve enclosed the link below) that the vehicle has valid road tax or use their trade plate when testing the vehicle.

You can check online whether a vehicle is licensed for road use via the DVLA website.

Untaxed Stock Vehicles And The (MID) Motor Insurance Database

There is no need to add these vehicles on the MID as the vehicles will be driven under your trade plate licence which must be recorded on the MID anyway. The licence plates must be on display in the vehicles when being driven.

You should still record with the MID details of: 

• vehicles owned, registered or leased to the business
• licensed demonstration and courtesy vehicles
• trade plates
• directors privately owned vehicles covered on the motor trade policy
• any stock vehicle that you register and tax for road use
• delete any vehicles that are sold, SORN or disposed of

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