George Osborne's Autumn Statement brought the news that the papercar tax disc is pulling over to retire after 90 years on the road.
For the first time motorists will be able to pay theirVehicle Excise Duty monthly via direct debit, under plans being announced bythe chancellor as part of his Autumn Statement.
The Government will also make it cheaper to pay bysix-monthly instalments, in a move that is expected to save motorists who choseto spread their payments over the year more than £20 million.
Those who are not online or do not wish to pay by directdebt will still be able to tax their car in person at the Post Office or overthe phone.
Speaking about the proposed changes a Treasury spokespersonsaid: "This is a visual symbol of how we are moving government into the modernage and make dealing with Government more hassle free."
The move is expected to save businesses £7 million a year inadministration costs alone.
The DVLA and police already rely on the electronic vehicleregister so the tax disc is no longer needed for enforcement purposes.
The changes will come into effect on October 1 next year andwill be legislated for in the Finance Bill.
Road tax was introduced in the 1888 budget and the currentsystem of excise duty applying specifically to motor vehicles was introduced in1920.