In the United Kingdom, all vehicles used or kept on public roads must be taxed and displaying a valid tax disc or face hefty penalties. Vehicle tax, also known as vehicle excise duty (VED) or road tax, is a legal requirement that helps fund the building and maintenance of the country’s road network.
This guide will provide an in-depth overview of vehicle tax rules in the UK, including who has to pay, how much it costs, exemptions, payment methods, and how to stay compliant to avoid fines.
Who Has to Pay Vehicle Tax?
With a few exceptions, vehicle tax must be paid on all vehicles registered in the UK and used on public roads. This includes cars, motorcycles, light goods vehicles, heavy goods vehicles, buses, mobility scooters, and motor caravans.
The registered keeper of the vehicle is responsible for paying vehicle tax, even if they are not the person driving or using the vehicle. If the vehicle is sold, the new keeper must re-tax the vehicle in their own name.
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How Much Does Vehicle Tax Cost?
The cost of vehicle tax depends on the vehicle’s CO2 emissions and its type. Broadly speaking, the lower the emissions, the lower the rate of tax due.
For petrol and diesel cars first registered after 1 April 2017, rates are split into 13 bands based on CO2 emissions. The lowest band for emissions up to 100g/km is £0, while the highest band for emissions over 255g/km is £2,365. Most vehicles fall somewhere in between.
For cars registered before April 2017, there are just two flat rates – £150 for petrol/diesel engines and £145 for alternative fuel vehicles.
Motorcycles have a flat rate of £20 per year, while motor caravans cost between £265-£355 depending on weight. Rates for light goods vehicles, heavy goods vehicles, and buses vary significantly based on factors like weight, type of fuel, and emissions.
Payment Methods
You can pay vehicle tax in the following ways:
- Online at gov.uk/vehicletaxrules
- By phone on 0300 123 4321
- At the Post Office by showing a valid reminder (V11) or new vehicle rate (V85) letter
- Annually by direct debit if your vehicle tax is £120 or more
If paying in full would be difficult, you can set up a vehicle tax Direct Debit and pay monthly instalments by going online or calling DVLA.
Exemptions and Discounts
Some vehicles are exempt from paying vehicle tax. This includes electric vehicles, mobility scooters, and certain vehicles used by disabled people. Historic vehicles over 40 years old are also exempt, as long as they have not been substantially changed in the last 30 years.
Drivers who receive certain disability benefits may be entitled to a 50% discount on vehicle tax. Benefits that qualify for the discount include the higher rate mobility component of Disability Living Allowance.
Car owners can also claim a refund on any full remaining months of vehicle tax if they sell or take their vehicle off the road and obtain a Statutory Off Road Notification (SORN).
How to Stay Compliant
To legally drive or keep a vehicle on UK roads, you must have vehicle tax or a SORN. Driving without this could land you with penalties.
Remember to always tax your vehicle before the current tax disc expires. The DVLA sends out renewal reminders (V11 or V85 letters), but keeping track yourself is recommended.
If you fail to tax your vehicle, you could face consequences such as:
- A penalty of £80 (reduced to £40 if paid within 28 days)
- Your vehicle being clamped or impounded
- A court prosecution
- Five to eight penalty points on your driving licence
- A maximum fine of £1,000 (£2,500 in some cases)
To avoid falling foul of the law, set a reminder ahead of your vehicle tax expiry date so you have time to re-tax on time using one of the methods above, or even better use our FREE road tax reminder service.
In summary, vehicle tax is a legal requirement for the vast majority of vehicles on UK roads. By understanding the rates, exemptions, payment methods, and staying compliant, you can ensure your vehicle is taxed properly and avoid penalties. With annual costs ranging from £0 to over £2000 depending on your vehicle, it’s wise to budget for this ongoing expense.
