Paper tax discs will be replaced with electronic system from October 2014, with monthly direct debit option for 5%.
The tricky task of trying to remove the circular car tax disc from its perforations will soon be a thing of the past, as the government moves to a paperless system.
After the best part of a century, paper tax discs are to be replaced with an electronic system, allowing motorists to pay for their vehicle excise duty by monthly direct debit.
It will allow drivers to spread payments, although at a cost of an additional 5%, and save businesses an estimated £7m a year in administration costs.
The changes will form part of the finance bill next year, and are expected to come into effect from October 2014.
Drivers who are not online will be able to tax their car in person at a post office or by phone.
A Treasury spokesman said: "This is a visual symbol of how we are moving government into the modern age and making dealing with government more hassle free."
