Guide to Vehicle Tax

If you’re a new driver buying your first car, you’ve probably not had to tax a vehicle before. Don’t worry – it’s all pretty straightforward, but here’s a quick guide to what’s involved.

Who should tax their vehicle?

With a few exemptions, everyone should tax their vehicle on the day they buy it.  You can buy road tax for a full year or for six months at a time (but you’ll pay a 5% surcharge for six months).

Vehicle tax price bands

Vehicle tax rates are currently based on engine-size, or fuel-type and CO2 emissions, depending on when the vehicle was registered. Check the price band that your vehicle falls into.

Don’t panic if you don’t understand which price band applies to your car; when you apply for or renew your vehicle tax, the amount due is calculated automatically based on the information the government holds about your car.

Changes to pricing in 2017

Big changes to vehicle tax pricing come into effect in April 2017.  The level of a car’s CO2 emissions will only be taken into account for the first year after it’s registered. After this, a flat rate of £140 per year is being introduced and only zero-emission cars will be exempt from paying vehicle tax completely.

Check if your vehicle is taxed

If you’re not sure whether your vehicle is taxed, this government service will check for you. All you need to know are the make of the vehicle and its registration number.

Road tax renewal

You’ll receive a reminder (a V11 form) about three weeks before your vehicle tax is due for renewal. This will provide details of how to renew and pay for it (by phone, online or at a Post Office).

Recent changes to the vehicle tax system

Vehicle tax is non-transferrable to a new owner

Under old rules, it was possible to transfer unused road tax to a new owner, but that’s now changed. If you’re buying a car, the seller will cancel his vehicle tax and you will need to pay to re-tax it from the date of purchasing the car.

It’s worth noting that if you buy a car near the end of the month, you’ll still pay vehicle tax for the whole of that month.  Similarly, if you’re selling a car you’ll pay for the whole month even if you sell the vehicle on the first day of the month. This wasn’t so bad when you could transfer unused road tax to a new owner, but it’s a nice little earner for the government under the new rule. Timing is everything!

No more tax discs

Paper tax discs were scrapped in October 2014. These days, a DVLA database is used to check that a vehicle is taxed, making it very difficult to avoid paying it.

If you don’t have the V11 form when you pay at a Post Office, you can use the V5C vehicle registration document (log book), or if you’ve just bought the vehicle, use the new keeper supplement (V5C/2).

Vehicle tax refunds

You can cancel your vehicle tax (officially called Vehicle Excise Duty, but also commonly referred to as road tax) and get a refund for any full months of remaining tax if:

  • you’ve sold or transferred it to someone else
  • the vehicle is permanently off the road (you must complete the official Statutory Off Road Notification)
  • an insurance company has written off your vehicle
  • it’s been scrapped
  • it’s been stolen
  • the vehicle has been exported out of the UK
  • it’s registered as exempt from vehicle tax

Who’s exempt?

A few categories of vehicle don’t have to pay road tax. It’s important that you apply for road tax exemption each year even if you believe you’re exempt from paying the tax, otherwise you could be fined.

  • vehicles used by an eligible disabled person
  • disabled passenger vehicles used by organisation providing transport for disabled people
  • mobility scooters and powered wheelchairs 
  • vehicles made before 1st January 1976
  • electric vehicles
  • grass mowers
  • agricultural vehicles

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Released On 15th Sep 2016