From today, you don't need to display a tax disc in your car.
Paper versions are no longer being issued as the system moves online.
It's hoped it'll save the taxpayer £10m pounds a year.
One key change from today is that car buyers won't be able to take advantage of the remaining months and days of the car's existing VED and will need to renew the tax.
The AA said some of its members had complained that the Government will get "double money" from drivers in some cases as someone selling a car during the month will not be able to get a refund for the rest of that month but the buyer must tax the vehicle and pay for the entire month if they want to drive it.
The RAC say the number of motorists failing to pay VED could become as high as the number who drive without insurance. They say the economy could lose out on £167 million a year.
But the DVLA has said there is "no basis" to the RAC figures, adding it is "nonsense" to suggest getting rid of the tax disc would lead to an increase in vehicle tax evasion.
Those selling a vehicle will be able to claim a refund from the DVLA for unused months of road tax.
People who haven't paid tax will be found on cameras which reconise number plates automatically or check information with police records.
Read about today's changes right here