What Is Car Tax?

Car tax sounds simple – it’s the annual tax that you pay to keep your car on the road. But the actual workings of who pays how much tax, and when, can be considerably more complicated than that.

If you’re confused by some of the details of car tax, you’re not the only one!

So if you want to know everything about car tax, how much you need to pay, how to pay it, and how to check your car is taxed, you’ll love this article. It explains all you need to know.
Let’s get started!

Car tax explained

Car tax, or vehicle excise duty (VED), is the annual tax that you pay to keep your car on the road.

Sometimes people call it ‘road tax’, ‘DVLA road tax’ or ‘DVLA tax’. That’s because originally, all car tax revenues went into a Road Fund to pay for roadbuilding – and DVLA is the authority charged with collecting it.

You can therefore easily make a quick dvla vehicle check online. Here is the explanation on how to check your car tax.

How do I check if my car is taxed?

How to answer the question: “is my car taxed?”

It’s very simple to check car tax on DVLA. All you need is your registration number. Enter it at https://www.gov.uk/check-vehicle-tax for a DVLA vehicle tax check and you’ll be told:

  • Whether your tax is up to date
  • When your tax is due
  • When your MOT expires (so you can check tax and MOT at the same time).

Cars over three years old need to be checked by an authorised mechanic to get an MOT certificate, stating that they are roadworthy. If your car is a new one, you won’t need to worry about an MOT. 

The DVLA car check will also show basic information about the car together with your car tax check, so that you can ensure the information held is correct. And yes, the car tax checker is free!

Can I pay my car tax online?

Paying your car tax used to mean queuing up at the Post Office – but not anymore. Now, it’s easy to pay vehicle tax online on the UK government website. However, you’ll need a reference number from one of a number of documents to pay online:

For car tax renewal 

  • A V11 tax reminder (the letter the DVLA sends when tax must be paid)
  • A ‘last chance’ warning letter to tax your car from DVLA
  • Your vehicle log book (V5C) if it is in your name.

For a car you have just bought

  • The green slip for a ‘new keeper’ from the log book.

If you don’t have any of these, you may need to apply for a new log book. You’ll have to do that at a Post Office, and it will cost you £25. It can take 4-6 weeks to get one.

If you actually like going to your local Post Office, by the way, you can still tax any vehicle there, but remember you’ll need to take your logbook or ‘new keeper’ slip with you, as well as a valid MOT certificate if your car is over 3 years old. 

What do I need to tax my car?

In order to tax your car you’ll need to fulfil two requirements;

  1. It must be insured.
  2. It must have a valid MOT certificate (unless it’s under 3 years old).

The DVLA’s tax database automatically knows whether your car is insured. If it isn’t, it won’t let you pay your tax. It also knows whether you have an MOT.

However, if you pay at a Post Office, which doesn’t share the same data, you will need your MOT certificate. In Northern Ireland, you’ll also have to show your insurance certificate or cover note. As you can see, paying online is much simpler.

How much is car tax? 

You may be hoping that this question has a simple answer. Unfortunately, the amount of tax that needs to be paid depends on quite a few different factors, including:

  • C02 emissions
  • The date the car was registered
  • The date whether the car is new (ie you’re paying its first year of tax)
  • The original list price of the car.

So there’s no simple online UK car tax calculator – you’ll need to go through a few steps to find the right tax rate. 

The first thing you need to know is when your car was first registered. That will tell you which method of taxation is used.

Cars registration dateExplanationTax amount
Cars registered after 31/03/2017First year tax based on CO2 emissions
  • Future years

£140 if car cost less than £40,000 (£130 for cleaner fuels)
  • £450 if car cost more than £40,000
  • Electric cars: zero, unless they cost over £40,000 (£310 tax)
Older cars – as long as they were registered after 1 March 2001Organized into tax bands from A to M, depending on the rate of C02 emissions
  • Cars in band A: £0 
  • Cars in band M: £570
Cars registered before March 2001Road tax is calculated according to the size of the engine
  • Engine up to 1.49 litres : £155 
  • Engine bigger than 1.5 litres: £255
Yearly tax amount (in £) by car registration date

Find below more details. 

New cars – cars registered after 31 March 2017

New cars pay tax based on their fuel type and C02 emissions; this can vary between zero and £2,070:

  • Most diesel cars pay a higher tax (eg £145 at 91-100 g/km C02 vs £125 for petrol cars).
  • But ‘clean diesel’ cars that meet the RDE2 emissions standard pay the same rate as petrol cars.

In year two and for future years, cars that had a list price under £40,000 pay £140 (£130 for alternative fuels like LPG or CNG), except electric cars which pay no tax at all. Cars that cost more than £40,000 pay £450 (petrol and diesel) and electric cars in this category pay £310.

Older cars – as long as they were registered after 1 March 2001

See below car tax bands.

Cars registered before March 2001

Tax is simpler if you have an older car. There are only two car tax rates for these, depending on the size of the engine. Note that contrary to popular belief the lower rate only applies up to 1.49 litres – a 1.5 litre engine is in the higher band.

For chapter and verse you can look up the gov vehicles tax on DVLA website.

What are the car tax bands?

The car tax bands A to M apply to cars registered between 1 March 2001 and 31 March 2017. Each road tax band reflects the car’s C02 emissions and determine the amount of road tax its owner needs to pay. 

You can find out your C02 emissions by using the government’s online emissions checker. You’ll need your logbook (V5C); for newer vehicles, the information may be in your logbook.

As you can see, once you get past Band I the tax rates start to rack up very fast indeed. But if you have an electric car, or a fuel efficient hybrid, you may not have much tax to pay.

A guide to car tax bands:

Tax band letterC02 Emission g/kmTax (annual single payment)
A0-100£0
B101-110£20
C111-120£30
D121-130£125
E131-140£145
F141-150£160
G151-165£235
H166-175£235
I176-185£260
J186-200£300
K201-225£325
L226-255£555
M255+£570
Car tax bands: CO2 emissions and tax amount

Why do different vehicles have different tax rates?

The government has tried to introduce car tax that takes account of a car’s carbon emissions, making dirtier cars more expensive to tax. But the decision was taken to change the tax only for new cars. 

That means if you bought a new car in 2010 specifically to take advantage of a low tax rate, you’ll still get the benefit – but does it makes life more complicated.

The earlier engine size related tax, of course, was motivated purely by the idea that a bigger car paid a bigger tax!

Can I drive my new car before taxing it?

The short answer is no.

Road tax liability rests with the owner of the car, not the car itself. Tax payments are not transferable. 

So if you buy a used car, you need to tax it in your own name using the ‘new keeper’ slip before you drive it away (the rules changed in 2014, when the paper road tax disc was discontinued.)

If you buy a new car from a dealership, sometimes they will pay the car tax as part of the deal – but they’ll need your insurance details first, so they can tax it in your name.

If you’re taking a car for a test drive, you should also check that it’s taxed (and that you’re insured to drive it) before you go for a spin.

What happens if I don’t tax my car?

If you are caught driving an untaxed car, you’ll get hit with a £50 non-endorsable fixed penalty notice by DVLA – but if the police catch you, they can fine you up to £1,000 on the spot.

If you keep an untaxed vehicle on the road, the fine is £80. But if you’re a persistent offender, that can go up to £1,000. Your car can also be impounded or clamped, and you may have to pay to release it.

Worse, though, if you don’t tax your car, your insurance is invalidated. Imagine that you smash up your new Porsche on the way home without having made sure the dealer had taxed it for you… It’s much better to be taxed and fully insured!

Remember DVLA has that big database? A DVLA check will easily find out if you haven’t taxed your car, and your fine will arrive in the post automatically.

OffenceFine
Driving an untaxed car£50 from DVLA, up to £1,000 on-the-spot from police
Keeping an untaxed vehicle on the road£80 from DVLA
Persistent offencesup to £1000 – from DVLA but can be pursued as a criminal offence via magistrate’s court
Car tax offences and fines

What cars are exempt from paying car tax?

There are a few exemptions to car tax. But even if you don’t pay the tax, you still need to fill in the forms, so that DVLA has an accurate record of what cars are on the road and who owns them. These exemptions are:

  • Drivers who are disabled, or nominated drivers for a disabled person
  • Historic vehicles made before 1 January 1979
  • Electric vehicles with a list price below £40,000
  • Agricultural vehicles used off the road (with road use limited to 1.5 km, for instance between the farm house and a field)
  • Vehicles that are kept off the road – you’ll need to make a SORN declaration.

Can I tax my car without insurance?

The answer is no. You must have a valid insurance going on to be able to tax your car. 

You may not be obliged (except in Northern Ireland) to show your actual insurance document. But you still need car insurance anyway. 

If you don’t how to proceed in order to check if your car is insured, check out our article.

There are, again, only one exception where you do not need either to insure or to tax your car, it is when you car is off the road and declared as SORN (Statutory Off Road Notification) and you keep it in a private land or garage days and nights. 

Get to know more on how to declare a SORN here.

When is my car tax due? 

When you buy a car, you need to tax the car immediately – before driving it away or even letting the previous owner park it on the road. The previous owner’s tax doesn’t transfer to you.

Otherwise, your car tax will be due at the start of the calendar month in which you first taxed the car. That means you get a bit less than a full year for your first tax payment. If you buy your car on October 31st, you’ll need to tax it again next October 1st; you’ll have lost a whole month!

Actions that affect your car taxExplanation
Buying a car – newCheck whether the dealer will tax your car for you – if so, give them your insurance details.
Buying a car – secondhandCar must be taxed immediately using the ‘new keeper’ slip.
Selling a car or transferring ownership (eg giving your car to another member of your family) Inform DVLA as soon as you sell the car or transfer ownership. Your remaining complete months of tax will be refunded (so for instance, if you sell in January, you’ll be refunded from 1st February).
Taking your car off the road Apply for SORN and you’ll be refunded any remaining complete months of tax.
Scrapping a carYou should get a refund of any remaining complete months of tax when you return the paperwork
Actions that affect your car tax

How do I get car tax refund?

Fortunately, in most cases, refunds have been automated. When you tell DVLA that you have sold your car, taken it off the road, or had it written off or scrapped, you’ll automatically get a refund of the remaining complete months of your insurance. That won’t include the remaining days of the month in which you inform DVLA of the change.

If your car is stolen, when you report it missing to the police, they will inform DVLA. If your car isn’t found within a week, you can apply for a car tax refund by letting DVLA know. However, if your insurance company pays out your claim, it is treated as if you sold your car to the insurer – so you need to inform DVLA that you are transferring ownership, and you’ll automatically get a refund.

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