THE new car tax system could lead to more drivers failing to pay insurance.

Gary Whittle, of the Bolton Institute of Advanced Motorists, says he would have preferred to keep tax discs on the front of cars rather than rely on computer equipment.

Mr Whittle says that computers may incorrectly read the licence plates of drivers who have not paid their tax, which could result in drivers who have paid their tax being unfairly punished.

As of last week, it is no longer necessary for motorists in the UK to display a paper disc on their vehicles.

Instead, traffic cameras will use automatic number plate recognition to work out if a car has up-to-date tax.

The RAC has warned that the new system could cost the Treasury £167 million a year, due to untaxed and uninsured drivers.

Mr Whittle said: “I would have thought it was a better idea to have tax discs or insurance details on the windscreen, rather than rely on technology.

“If people haven’t insured their vehicles they are not likely to be worried about tax either.

“I’m worried that this new system could encourage more people not to pay tax, which is a risk in the event of an accident with another driver.”

He added: “A computer might find it difficult to read certain number plates — if they are dirty, for example — which may lead to them being read incorrectly.

“As a result, many people who have paid their tax may be incorrectly punished.”

According to the new system, the DVLA will issue warnings to drivers who may have forgotten to pay their car tax.

Drivers who subsequently fail to pay could face a fine of up to £1,000 as the full weight of the law is brought to bear and implemented .