Before you get too excited about some generous savings handed out by the government to the motoring public, whilst the tax disc has had its day - the last ones will be issued up until October this year - Vehicle Excise Duty, of which the disc was evidence of payment, remains.
The disc has always been a bit more than a glorified receipt. To get a tax disc (even the nil disabled rate) you had to show that on the day it was issued the vehicle was registered to you, insured and MOT tested if necessary. Whilst it only ever showed on that day you were legal, it was a good way of flagging up vehicles that were not legal at any point to police. I was aware of someone who took out one year’s policy of insurance the day they taxed their car and then cancelled it for a refund the following day! They wanted a tax disc in the window so they didn’t get stopped by the police.
Technology has, however, overtaken the disc; the MOT certificate is no longer a watermarked piece of art simply because what matters is the record on the computer made by the tester and available to police. Similarly, insurance certificates are often not even posted now, as the insurance company records the cover on the Motor Insurance Database (MID) which the police have access to. I suspect in years to come the coloured tax disc will be in demand for cars used in filming or in museums… from October expired ones will be just a piece of history that served their purpose but ultimately were too expensive to administer.