- 1 What happens if my vehicle isn’t taxed, or if I haven’t submitted a SORN for a vehicle that’s ‘off-road’?
- 2 How is the value of my car tax worked out?
- 3 Will I get a tax refund if I sell a car which has been taxed beyond the date of sale?
- 4 How do I go about taxing my car?
- 5 Are there any vehicles that are exempt from tax?
- 6 When will my tax be due for renewal?
- 7 What cars attract the cheapest tax rates?
- 8 How do I know if my vehicle has been taxed?
- 9 Environmental considerations in road tax calculation
- 10 The method behind car tax
- 11 Cars registered after 1st April 2017
- 12 Cars registered between 1st March 2001-31st March 2017
- 13 Cars registered before 1st March 2001
- 14 Tax on motorcycles, mopeds, and motorised tricycles
- 15 How do I tax my car?
- 16 What if I choose not to tax my vehicle?
- 17 What happens to any outstanding tax on a vehicle I’ve just purchased?
What happens if my vehicle isn’t taxed, or if I haven’t submitted a SORN for a vehicle that’s ‘off-road’?
The DVLA will usually respond to this by issuing you with an £80 fine (reduced to £40 if paid within a fortnight). However, the size of punishment could rise exponentially dependent on whether you continue to violate tax rules. In a worst-case scenario, this could lead to legal prosecution.
How is the value of my car tax worked out?
For most road users, car tax is calculated based on their CO2 emissions. This is then cross-referenced with whether they deliver on RTED2 requirements, and also whether their engines run on petrol, diesel or alternative fuels. If your car was purchased prior to 1st March 2001, your tax payment will be based on your engine size. This is the metric also used to calculate annual tax rates for motorcycle, moped, and motor tricycle owners.
Will I get a tax refund if I sell a car which has been taxed beyond the date of sale?
Yes – providing the relevant section of the V5C form is completed and returned to the DVLA. If purchasing a new vehicle, you must tax your car before driving.
How do I go about taxing my car?
The easiest way to tax your car is via the gov.uk website. To complete your tax registration, you’ll need your vehicle reference number. This is available on your V11 reminder document, vehicle logbook, or green ‘new keeper’ slip. You can also tax your car at a local post office branch. Please note that it is possible to tax a vehicle on someone’s behalf.
Are there any vehicles that are exempt from tax?
Yes – any vehicle fitting one of the descriptions listed below is not liable to having their owners pay tax. However, even if the payment amount is zero, owners must still register their vehicles for tax purposes.
- Vehicles owned by qualifying disabled users
- Cars registered prior to 1st January 1979
- Electric vehicles valued at over £40,000, and registered after 31st January 2017
- Electric vehicles where electricity is supplied from an external power source
- Any vehicle used for the purposes of agricultural, horticultural, or forestry work.
When will my tax be due for renewal?
Vehicle tax is calculated on an annual basis. You may opt to pay your tax monthly, six-monthly, or each year, but this basic timeframe premise remains. Therefore, ultimately, your car tax is due for renewal each year. If you continue owning the same vehicle and are paying via direct debit, you will automatically keep paying tax on your vehicle. Therefore, no further action is required (each year).
What cars attract the cheapest tax rates?
As tax is now completely dependent on fuel emissions, cars with low carbon dioxide and nitrogen oxide releases are the most inexpensive to tax. For this reason, electric cars have the lowest taxation rates applied.
How do I know if my vehicle has been taxed?
The easiest way to do this is by typing your registration plate number into our free car tax check tool provided above. However, you can also check the car’s Vehicle Identification Number (VIN) against the DVLA’s full list of licensed vehicles. If it’s not present on this list, you’ll know your car hasn’t been appropriately registered for tax.
If you’re a vehicle owner in the UK, you must register for Vehicle Excise Duty (VED). This is more commonly referred to as car tax or road tax. All active vehicles, whether driven or parked on a public highway, must be taxed. However, if your vehicle is off-road, and you don’t intend to use it for some time, you can SORN your vehicle. Holding a SORN, or Statutory Off-Road Notification, enables you to not pay tax whilst your vehicle is off-road. Nevertheless, as soon as this vehicle is used or moved to a public location, it becomes automatically taxable.
Environmental considerations in road tax calculation
Nowadays, the amount of car tax you pay is directly proportionate to your vehicle’s carbon dioxide (CO2) emissions. Quite simply, the higher the volume of emissions, the more you’ll pay for taxing your vehicle. This is because the UK government is eager to clamp down on the level of carbon dioxide being emitted into the atmosphere. Clearly, the release of carbon dioxide has a damaging impact on the environment. Therefore, by imposing an expensive taxation rate on vehicles emitting high levels of carbon dioxide, the government hopes that road users will be encouraged to opt for more eco-friendly solutions.
The rise of electronic vehicles (EVs) over the last few years has been staggering. A huge, contributing factor to this, is the population’s greater awareness of climate change issues. Society is now far more ‘tapped-in’ to this problem than even a decade ago, and therefore many individuals are making efforts to operate in a more environmentally-friendly manner. However, tax havens on electric vehicles provide a further reason as to why road users would be sensible to opt for these types of cars. Indeed, many EV owners are not required to pay any car tax on their vehicles whatsoever.
The method behind car tax
Although usage of EVs has risen dramatically, petrol and diesel cars are still the most common types of vehicles on the road today. Tax rates for modern petrol and diesel cars are compartmentalised into VED bands. These guidance groups inform road users about the tax applied per volume of CO2 emissions released. Therefore, before purchasing a vehicle, you’ll be able to see how much tax you’ll be due to pay.
There are then sub-sections to these bands, based on the age of the vehicle. There are three different age brackets in operation, and these serve to impact the way in which car tax is calculated, and the upper limit of what you might have to pay. These sub-sections are as follows:
- Cars registered after the 1st April 2017
- Cars registered between 1st March 2001-31st March 2017
- Cars registered prior to 1st March 2001.
In the unlikely event that your vehicle has been registered prior to 1st January 1979, you’ll not need to pay any road tax. For reference, the car’s ‘registration date’ refers to the moment that the original owner notified DVLA of their intention to tax the vehicle, not when the vehicle was physically sold (however, this should be in and around the same date).
Cars registered after 1st April 2017
As mentioned, taxing a vehicle of this age is index-linked to the volume of carbon dioxide it emits. This rises in increments from £0 to pay on zero emissions, all the way through to £2,365 (dependent on vehicle) if the car emits greater than 255g of Co2 per km driven.
Within this banding, cars are then further categorised based on their fuel classification. This is largely based on their performance versus RDE2 standards. Real Driving Emissions 2 (RDE2), refers to a measure which sets a maximum quantity of nitrogen oxide (NOx) emissions that a vehicle releases. Should a car exceed this guideline amount, the vehicle will be taxed more heavily than other, more environmentally-conducive options.
Breakdown by fuel type
Petrol cars and alternative fuel cars (such as electric vehicles) typically release far less NOx, and are therefore automatically not susceptible to any RDE2-related additional charges. Indeed, alternative fuel cars are taxed less than any other vehicle apart from those which run on battery-powered electricity. Therefore, this approach is really in operation to determine which diesel cars are RDE2 compliant.
Each vehicle, dependent on engine type, is allocated a tax code. Regardless of whether they’re RDE2 compliant or not, diesel cars receive the ‘TC49’ code. Petrol vehicles are classed under ‘TC48’, whereas ‘TC59’ cars refer to those running on alternative fuels. This segregation makes it easier for road users and tax calculators to swiftly identify the rates applied to different engine types.
The scale of the tax rate differential between RDE2 compliant and non-compliant vehicles grows in unison with the level of carbon dioxide emissions. For example:
- An RTED2-compliant car that emits 56g to 90g of CO2 per km, leverages a full-year tax charge of £120. Owners of alternative fuel cars emitting the same levels of carbon dioxide will pay £110 for the year, whereas non-compliant RDE2 diesel vehicles will generate a tax payment of £150.
- If the same type of vehicle is costed against a more substantial emission level, the charge bandwidth increases significantly. Indeed, if a car releases 151g to 170g of C02 per km driven, the charges that now apply to owners are as follows:
- RTED2 compliant vehicles (petrol/diesel cars under RTED2 threshold): £585
- Alternative fuel vehicles: £575
- Diesel cars non-compliant with RTED2 standards: £1420
Therefore, opting to purchase a car with high NOx and CO2 emissions could hugely inflate the size of your taxation payment. Furthermore, you should bare in mind that tax rates for alternatively fuelled cars, such as EVs, only kick in when a car is designed to release over 50g of CO2 per kilometre. Therefore, given that electric vehicles are constructed with a huge focus on reducing carbon footprints, the likelihood is that most EV owners will not need to pay any road tax. Furthermore, if your EV car has a purchase price of over £40,000, you’ll automatically be exempt from paying any VED.
However, please be aware that the aforementioned rates only apply to the first year of your car ownership. After these initial twelve months have passed, you’ll be charged a lot less than the original tax payment value. Furthermore, the RDE2 surcharge is completely dropped, whilst the CO2 emission brackets are re-categorised into two simple groupings; zero-emissions, and any emissions. Regardless of the level of NOx or CO2 being emitted, petrol and diesel cars are taxed at an annual rate of £165 per annum once the first-year tax cycle has elapsed. Non-electric alternative fuel car owners will pay £155, whereas all EV drivers needn’t pay anything to tax their vehicles.
The only exception to this rule is if a car costs over £40,000. As previously mentioned, EVs will still be exempt from paying tax. However, regardless of whether the vehicle is petrol or diesel, if your car exceeds this value, you’ll need to pay an additional charge of £355 per annum for the next five-year period. Therefore, for example, if driving a diesel car beyond your first year of ownership, you would be required to pay the original £165 charge, plus the extra £355 levy, making your total taxation payment rise to £520 per annum. Clearly, this would be applied from years two to six of car ownership. After this point, you’ll then drop down to the standard rate, paid by owners with vehicles costing less than £40,000.
Approaching your next vehicle purchase
Therefore, for modern vehicles, you can see that a variety of elements are factored into tax calculations. Given the extent of the potential costs involved, it’s always worth considering the scale of tax payments when purchasing a new car. Furthermore, due to the intensive focus on improving ‘green’ behaviours and reducing carbon footprints, it’s likely that the gap between tax rates on EV and non-EV cars will grow even wider in years to come. Therefore, if keen to pursue a cost-effective vehicle option, it may well be worth considering the purchase of an electronic car.
Cars registered between 1st March 2001-31st March 2017
Vehicles in this age bracket are generally much cheaper to tax. Again, even though climate issues were less vocalised during the timeframe mentioned above, tax payments on these vehicles are dependent on carbon emissions.
However, the government offers complete tax relief for any cars registered within this period, providing they emit less than 100g of CO2 per kilometre. Furthermore, the charges applied to each incremental grouping are lower, resulting in a reduced rate of taxation regardless of comparable emissions. For example, a diesel vehicle (which does not comply with RDE2 regulations) purchased on or after 1st April 2017, which uses 125g of carbon dioxide per kilometre driven, will demand a tax payment of £230. In comparison, any car registered between the start of March 2001, and the end of March 2017, with an equal volume of carbon emissions, will only result in £135 being paid. The higher the carbon emissions represented in newer cars, the more accentuated this bandwidth becomes.
Cars registered before 1st March 2001
Rather than tax being calculated on the basis of carbon emissions, cars registered before March 2001 are subject to tax payments based on engine size. This is measured in CCs, or cubic centimetres, in relation to the power of motorised engines.
In this age bracket, only two distinctive categories are used to determine the taxation level applied. These are vehicles equipped with engines of over 1549CC, and those which are fitted with engines under this threshold. If the engine is over 1549CC, owners will need to pay £295 in tax per annum. The rate for those driving with smaller engines is £180 per year.
‘Historical’ vehicles, registered 40 or more years ago, are exempt from paying tax.
Tax on motorcycles, mopeds, and motorised tricycles
In similarity to cars registered prior to 1st March 2001, these vehicles are taxed based on their engine size, as opposed to their carbon emissions.
Taxation rates on motorcycles, mopeds and motorised tricycles are typically much lower than those endured by car owners. However, this is because these sorts of vehicles have much lower carbon footprints due to their reduced engine sizes.
Motorcycles, mopeds and tricycles (which are over 450kg unladen), are taxed based on increments within an overall framework of 0 to over 600CC engines. The maximum anyone owning one of these vehicles would pay in road tax per year is £101.
The same maximum payment threshold applies to tricycles under 450kg unladen. However, there are only two classifications of engine for this vehicle type; over 151CC, and under 150CC. Tricycles in this weight bracket kitted with engines under 150CC carry tax rates of £22. Conversely, those harbouring an engine more powerful than 151CC attract the aforementioned highest tax payment in this category of £101 per annum.
How do I tax my car?
After purchasing a vehicle, you’ll need to immediately register it for tax purposes. This process must be completed before driving your new car. You can do this online, or by visiting your local post office.
To register your vehicle online, you’ll need to visit the gov.uk website. Furthermore, you’ll need your owner reference number, which is available on each of the following documents:
- V11 reminder document. This will be sent to you when the tax on an existing vehicle is due for renewal.
- Vehicle logbook. This should be provided to you by the previous owner after the vehicle sale has gone through.
- Green ‘new keeper’ slip. This will come attached to the VC5 document, issued when a new car is registered to the DVLA. The DVLA, or Driver and Vehicle Licensing Agency, is the gatekeeper of all active vehicles in the UK. They perform regular checks to ensure cars have been appropriately taxed, insured, and maintained via MOT inspections. Therefore, it’s extremely important to ensure the DVLA are aware of any vehicle you come to own. On most occasions, the seller will organise DVLA registration for you. However, if they haven’t done this, and therefore are not in a position to supply the V5C form, you can contact the DVLA yourself to register your new vehicle.
How to pay road tax
There are three different payment terms available in relation to paying your car tax. You can opt to pay monthly, every six months, or annually. If you choose to pay monthly or at six-month intervals, an extra 5% surcharge will be added to your payment amount. Therefore, in the long-term, it’s cheaper to pay your full-year car tax in one lump sum. The most common payment method, regardless of bill frequency, is via direct debit.
It is possible to set up a tax payment schedule without being the registered keeper of the vehicle. However, please note that all future correspondence will be delivered to the person who has established the direct debit payments. This approach may come in particularly useful when parents are purchasing vehicles for young dependents.
There are some circumstances where owners are eligible to not pay tax. This is the case if the car user is disabled, and either:
- Owns a mobility scooter
- Is entitled to a War Pensions’ Mobility Supplement, OR
- Is entitled to the Enhanced Mobility Component of Personal Independence Payment
What if I choose not to tax my vehicle?
Failure to tax a vehicle is ultimately a criminal offence, and therefore punishments are accordingly severe. This approach also applies to cars kept off-road, and a SORN application has not been filed. The only scenario where an owner would evade a penalty for not paying tax is when driving their vehicle to an MOT appointment. However, should the vehicle be stopped after flagging on the DVLA database, it is the responsibility of the owner to demonstrate that they’re on the way to an MOT Test Centre.
Owners who do not tax their vehicle accurately, in accordance with the car or bike’s specification, could also face punishment. For example, if a car’s engine has been upgraded to a larger size, thus potentially impacting carbon emissions, and the owner has failed to change their tax classification based on this development, they are also susceptible to being reprimanded.
The standard initial fine for not taxing a vehicle is £80 (please note that this fee reduces to £40 if paid within two weeks). However, should this penalty fee not be paid, or the owner continues to drive the vehicle without tax, the punishment could be much greater. This includes the possibility of debt collectors seizing property, additional fines of up to £1000, or even a court prosecution.
The DVLA have various methods for unearthing untaxed vehicles. Furthermore, they’ve been known to use heavy deterrents in order to discourage road users from attempting to evade paying tax. Therefore, it really isn’t worth attempting to drive a vehicle which has not been appropriately taxed!
However, if you’re a little forgetful, don’t worry! Prior to your tax validity expiring, the DVLA will send you a reminder letter. Furthermore, if you’ve already set up a direct debit, these payments will continue until you cancel them. Therefore, providing you keep the same vehicle, you’re tax will always be covered if you pay via this method.
You can also check your vehicle’s tax status, by using an online car tax check tool, such as the one above. Simply enter your vehicle’s registration plate, and click through to discover when your car is due for tax renewal.
What happens to any outstanding tax on a vehicle I’ve just purchased?
Even if a car’s tax payment has been covered for a period of time beyond your purchase date, you’ll need to start paying tax from the moment you own the vehicle. Conversely, if you’re the seller in this situation, you’ll be able to claim a refund on any over-payments made.
This refund will be automatically processed after submitting the V5C section relating to the sale of the vehicle to the DVLA. This is also the case if a pre-existing SORN payment exceeds the timeframe the seller requires it for. Once the DVLA has received your V5C document, it should take them approximately ten working days to issue any refund payments.