We Talk UK Vehicle Tax

The costs of keeping your car on the road run far beyond the purchase price, as every motorist knows here in the UK. Fuel, insurance and maintenance are all costs we factor into our finances each year, and there’s one very important legal requirement to budget for too: vehicle tax. But how does it all work? 

At Carlingo, we’re committed to making things easy to understand, so we’ve always got our eye on the legalities of car ownership, so that we can better explain it to our customers. Vehicle tax is one of those necessities that can often overwhelm and confuse, so we’re going to talk about UK vehicle tax here to explain what the score is. 

What is vehicle tax? 

Vehicle Excise Duty, commonly known as vehicle tax, car tax or road tax, is a fee paid annually on eligible vehicles in order for them to legally be able to travel on public roads. Historically, the tax status of a car was visible via a tax disc displayed in the windscreen, but nowadays failure to pay tax is picked up by Automatic Number Plate Recognition cameras and is searchable online.  

Payable to the DVLA, vehicle excise duty is, in part, collected to fund the upkeep of public roads, but it can also be directed into other public services where appropriate, such as education or healthcare. 

Vehicle tax tends to vary on the age, engine size, and carbon emissions of the vehicle, depending on when it was registered, so it’s important to know which band your car, van or motorcycle fits into. 

What cars need to be taxed? 

Most domestic vehicles require vehicle tax to be paid before they can legally hit the road, so it’s probably easier to tell you which vehicles are exempt from vehicle tax instead…

• Cars registered between 1st March 2001 and before 1st April 2017 that produce less than 100 grams of carbon dioxide emissions per KM driven. 
• Historic vehicles - that’s cars older than 40! 
• New cars that produce no carbon dioxide emissions, i.e pure electric vehicles (until 1st April 2025) 

There are some people that may be entitled to free vehicle tax as well as the vehicles themselves; if you have a mobility carriage (such as a mobility scooter), receive Enhanced Mobility Component of Personal Independence Payment, or receive a war pensioner’s mobility supplement, it’s worth checking if you may be exempt from paying Vehicle Excise Duty. 

How much is vehicle tax? 

From the moment it’s first registered, an eligible vehicle will need to be taxed, and for those over 3 years old, a valid MOT certificate will be required to do this. The tax will cover the vehicle for one year, and you’ll need to make sure there’s suitable insurance set up for the vehicle too - this, alongside the MOT, is checked electronically when you apply for tax. 

In 2020, Vehicle Excise Duty bands were changed, and the rules depend on when your car was first registered…

Cars registered after 1st April 2017

For the first twelve months from the date of registration, vehicle tax is due at a rate determined by the CO2 emissions a car produces. In the second year and beyond, it’s then due at a different rate, and can be paid in 6-month intervals, or annually, whichever you choose. The rates are as follows: 

There are a couple of things to note when you’re taxing a car that was registered after 1st April 2017: 

• If the vehicle has a list price of £40K or more, there’s an extra £355 to pay per year, unless the vehicle produces 0 emissions, though this is only due for 5 years from the second tax date. 
• From April 1st 2025, it has been announced that owners of cars that produce 0 emissions will need to begin paying the full road tax rate, so bear this in mind if it’s likely to apply to you. 

Cars registered between 1st March 2001 and 1 April 2017 

13 tax bands exist for vehicles registered within this window, with the amount of vehicle tax you pay depending on the fuel type and CO2 emissions of that vehicle. To find this information about your car or a car you’re looking to buy, double-check the V5 certificate, or you can search online. If you’re curious about a Carlingo car, just ask - we’ll be happy to help. 

These are the tax bands set out for vehicles registered between 1st March 2001 and 1st April 2017: 

As you can see, drivers of cars with lower emissions are rewarded with a lower rate of tax; the Government’s early steps towards a green incentive! 

Vehicles registered before 1st March 2001

Things are a bit more straightforward for cars of a certain age, as it’s based on engine size. If your car was registered before 1st March 2001 and the engine size is under 1549, tax for 12 months will cost £180. If it’s over 1549, the cost will be £295 per year. 

How do I pay vehicle tax? 

When you buy a car, you will need to pay for tax as soon as you take ownership; tax does not transfer with the car, so any remaining tax paid by the previous owner will be refunded to them. You’ll receive a reminder before your vehicle tax is due to expire, so, for example, if your car is taxed from 1st June, you’ll have until 31st May to renew. 

The easiest way to pay your Vehicle Excise Duty is online, simply by entering the reference number that arrives on your reminder letter. You can pay vehicle tax per year, every six months, or as a monthly payment. For a slightly higher cost, you can set up a direct debit, to remove the risk of forgetting to pay. Don’t forget, you need a valid MOT certificate, otherwise, you’ll be unable to complete your tax application. 

If online isn’t really your thing, you can call the DVLA directly, or head to your local Post Office, who should be able to help. 

What happens if you don’t pay your vehicle tax? 

Failure to pay vehicle tax can land you in hot water, with a fine of £80 to pay if caught, plus the possibility of court action, and even the risk of your vehicle being clamped or impounded. 

Even if you intend on keeping your vehicle off the road (for example, on a drive or in a garage), you still need to declare it to the DVLA, a status known as SORN (Statutory Off Road Notification). 

Find the car for you here in Harrogate 

At Carlingo, we’re proud to talk about all things cars with our customers on a daily basis, so if you’re finding tax on the vehicle you’ve fallen in love with a bit tricky to get your head around, we’re here to make it straightforward. 

Not fallen head over heels yet? What are you waiting for? There are so many vehicles to discover at our Harrogate dealership.