From October 1, paper tax discs on cars will become obsolete and will be replaced with an electronic register.
How should motorists pay their vehicle tax?
Motorists will be required to pay for their vehicle excise duty (VED) by direct debit.
Payments can be made monthly or six-monthly - both at an overall additional annual cost of 5% - or annually.
How do motorists check when they need to pay their vehicle tax?
The tax status of any vehicle can be found at the DVLA website by entering the car's registration and make.
Buying and selling vehicles from October 1
Vehicle tax will no longer be transferred, so new owners will need to buy new vehicle tax before driving their purchase.
Sellers should notify the DVLA of any change of ownership straight away or face a £1,000 fine.
They will receive an automatic refund to their bank account for any full calendar months left on the vehicle tax, once the DVLA has notification that the person the vehicle is registered to has sold it.
Tax refunds can also be made if the vehicle is:
Scrapped at an Authorised Treatment Facility
Removed from the road and the person on the vehicle register has made a Statutory Off Road Notification
Changed by its owner to an exempt duty tax class
How will car tax evaders be caught?
Motorists whose tax payments are not up to date will be tracked by automatic number plate recognition cameras.
Benefits of the new system
Increased payment options
Removes postage costs
Makes car tax evasion more difficult - with estimates suggesting the scheme could save taxpayers £10 million annually
Downsides of the new system
Many motorists appear unaware of the changes, according to website money.co.uk
Hefty fines for sellers who do not immediately notify DVLA of changes