Paying For Car Tax In The UK

Also known as VED (vehicle excise duty), car tax is paid for every vehicle on the road in Britain. There are some exemptions such as for the disabled and for cars with zero or low carbon emissions (depending on their year of registration). Payment can be made annually (for which there’s a discount), twice a year or monthly. Motorists found driving a vehicle without road tax are issued an on-the-spot fine of £80. Fines can reach up to £2,500 if the vehicle has been declared off-road. In this article we look at:

  • How much is car tax
  • When car tax payment is due
  • Cancelling your car tax

How much is car tax?

The amount of car tax you pay depends on the make, model, carbon emissions and/or value of the vehicle. Historic vehicles (which are 40 years or older) are exempt from paying vehicle excess duty. Cars registered before March 2001 are taxed according to engine size. Cars with an engine up to 1549cc are charged a flat rate of £155 while all models with an engine larger than 1549cc pay £255.

Motorists found driving a vehicle with no road tax are issued a fine of £80

Cars registered February 2001-April 2017 have their car tax calculated according to the type of fuel they use and their CO2 emissions. Vehicles are divided into bands. Cars which emit up to 100g/km of CO2 are exempt from paying road tax and then the amount increases according to how many emissions they produce. This reaches a maximum amount of £555 (for all cars which produce more than 255g/km of carbon emissions).

As of 1st April 2017, the way that car tax is calculated was changed again. In the first year after registration, the VED is based on the CO2 emissions of the vehicle. Cars which cost under £40,000 with zero emissions pay no tax, cars which produce 1-50g/km of CO2 pay £10 and then it goes up a sliding scale to reach a maximum of £2,070 for vehicles which emit over 255g/km of CO2.

A UK street busy with traffic

After the first year, the road tax depends on the fuel type used by the vehicle. For electric cars this is free, alternative fuels pay £130 while petrol/diesel vehicles pay £140. Cars which are worth over £40,000 pay a supplementary charge of £310 for the first five years.

Questions on paying car tax

How do I tax my car online in the UK?

If you wish to pay for your car tax online, this is possible and recommended as the most convenient way to pay your car tax. Be aware that you will need one of the following pieces of information: either the 16 digit reference number on your vehicle tax renewal letter (V11), 11 digit reference number on your log book (V5C), or if you bought your vehicle recently, the 12 digit reference number on your keeper supplement (V5C/2).

How do I claim back car tax?

When you decide to sell or scrap your old car, there may be some road tax left on your vehicle. DVLA will refund any remaining complete months that remain. The car tax refund will be triggered when you notify DVLA that you are selling your car using the yellow section 9 of your registration certificate (V5C/3).

Can you tax a car without insurance?

If you have declared your vehicle as off the road (SORN), then it is not mandatory to keep up the regular payments of tax and insurance. However, if you haven’t declared your vehicle as such, both car insurance and road tax payments must be kept up for the vehicle to be considered road legal.

When is my car tax due?

You can access the DVLA website to see when your road tax is due. All you have to do is supply the registration number of the vehicle. If your road tax is due to expire, you might also receive a V11 (recent reminder) or warning letter from the DVLA.

How do I cancel my car tax?

Road tax is most frequently cancelled because you wish to apply for a SORN (Statutory Off Road Notification), or because you have recently sold or transferred the ownership of the vehicle to someone else. In both cases, you will automatically be refunded any outstanding road tax on the vehicle since the remaining months of VED are no longer passed onto the car’s new owner. Car tax changes can be made online.


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