Checks to see if drivers have paid their road tax will be done electronically using databases, as most are at the moment
End of the road: Tax discs
The little circle of paper, which has been displayed in windscreens since 1921, will vanish from next October as Vehicle Excise Duty is brought into the modern age.
Checks to see if drivers have paid their road tax will be done electronically using databases, as most are at the moment.
This comes after the number of visual checks by police and the DVLA dropped 75% since 2008.
It is estimated that motorists will be £20million a year better off thanks to the move, with businesses saving £7million in admin costs.
Some of the savings from going paperless will be passed on to motorists.
The six-month road tax charge – a popular option – will fall from 10% to 5%.
Drivers will also be able to pay the tax by monthly direct debit for the first time.
Fees vary according to engine size and Co2 emissions.
For example, a 12-month fee is currently £140 for engine sizes under 1549cc, or £77 for six months.
A Treasury spokesman said: “These changes mean it will be easier to tax your car, and cheaper than before to do it by instalment.”
Post Offices and the police both support the move, the spokesman insisted.
Vehicle tax was introduced in 1888, when Queen Victoria was on the thrown and the Marquess of Salisbury was Prime Minister.
The current system of excise duty followed in 1920 and the original tax disk was introduced the next year.
It was plain grey paper printed with black ink and sometimes carried ads on the back.
The tax disc went colour in 1923 and perforations were introduced in 1938, making it easier to fit into a holder.
The modern design, incorporating anti-forgery measures, came in 1961.
Laws abolishing it will come in the 2014 Finance Bill and apply from October 1.