Hi Paxman,
I take it, from your post, you have been the registered owner since this the last tax disc? Any 'taxable' vehicle, last taxed after 31/01/98 needs a tax disc or a SORN. What I would suggest is you ring the DVLA, get a name of the person advising you, and tell them your predicament and that it was an oversight. I'm pretty sure you'll be okay without incurring their wrath. Failing that sell it (to me) rather than scrap it because a new owner can SORN it without any penalty.
Good luck.