The proposal forms part of a Department for Transport consultation on the future direction of the Driving Standards Agency, Driver and Vehicle Licensing Agency, Vehicle and Operator Services Agency and the Vehicle Certification Agency.

The move has been greeted by the British Vehicle Rental and Leasing Association (BVRLA), which has been campaigning for the Department for Transport to axe the tax disc for a number of years as part of a wider streamlining of DVLA services. 

The organisation says that such a visible means of demonstrating that a vehicle has been taxed is no longer required as this can instantly be confirmed by accessing the DVLA computers.

The BVRLA's chief executive, John Lewis, said: 'We estimate that removing this pointless piece of paper would save the government around £90m a year and produce major administrative cost savings for fleet operators as well.'