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Everything you need to know about road tax (VED)

| Insurance

In the UK, in order for you to drive a car on public roads, it is a legal requirement that your vehicle has a valid MOT (depending on the age of your vehicle), car insurance and is taxed, but how exactly do you go about the latter and what is road tax for? In this guide, you can find out all the information you need to know about road tax, including how much it could cost.

What is VED, or road tax?

Vehicle excise duty (VED), typically referred to as road tax, vehicle tax or a road fund licence, is a fee that must be paid to the government if you wish to drive your vehicle. VED helps to cover the cost of essential repairs to the roads and other safety measures that may be required.

Currently, any money paid as part of VED goes to the Exchequer and ends up mixed with all other tax money, including council tax, income tax, stamp duty, etc. This is due to change in 2020 so that any VED money goes directly towards maintaining the UK’s roads.

Although the name road tax is a more colloquial phrase for VED and not the official term, this article will continue to use it, as it’s the one most people are familiar with.

How much road tax do I have to pay?

So the big question is, how much does road tax cost? This depends on a variety of factors, including the type of car you drive, how old it is, how big its engine is and where you live. Some cars may even be exempt altogether. This means that one person could be paying nothing while another could be paying a few hundred pounds a year, for example.

The bracket that your vehicle falls into generally depends on its age, and the amount you pay will depend whether your car was registered:

  • Before March 2001
  • Between 1st March 2001 and 1st April 2017
  • On or after 1st April 2017.

For vehicles that were registered before March 2001,  tax will be based purely on the engine size. For those that were registered between 1st March 2001 and 1st April 2017,  the tax will be based on the official CO2 emissions for that car. Vehicles that fall under registration on or after the 1st April 2019 will pay tax based on their first year emissions - after that, it’s a flat rate.


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How is road tax calculated?

 

With all of the above in mind, how is road tax actually calculated for each type of vehicle?

Well, if your vehicle was registered before 1st March 2001, there are only two possible figures you could pay: £160 a year for vehicles with an engine size of 1549cc or smaller or £265 for vehicles with an engine size of over 1549.

For a vehicle registered between 1st March 2001 and 1st April 2017, the tax depends on the CO2 emissions of that vehicle. The more CO2 your vehicle produces, the more you will be taxed. This is part of the government’s clamp down on vehicles that are particularly bad for the environment. You can use the table below for your own interest to calculate your road tax if you know how much CO2 your car produces. However, please do keep in mind that the government will automatically calculate how much tax you will pay so you don’t have to worry about it.

CO2 emissions in grams per kilometre (g/km)

Annual road tax cost

Up to 100

£0

101-110

£20

111-120

£30

121-130

£125

131-140

£145

141-150

£160

151-165

£200

166-175

£235

176-185

£260

186-200

£300

202-225

£325

226-255

£555

Over 255

£570

Vehicles registered after 1st April 2017 will pay a different amount to that laid out in the table above. In the first 12 months, you will pay tax based on its CO2 emissions. Again, if you know how much CO2 your vehicle generates, you can use the table below to calculate how much road tax you need to pay.

CO2 emissions in g/km

Annual road tax cost

0

£0

1-50

£10

51-75

£25

76-90

£110

91-100

£130

101-110

£150

111-130

£170

131-150

£210

151-170

£530

171-190

£855

191-225

£1,280

226-255

£1,815

Over 255

£2,135

Notice the huge increase of £320 between 131-150 and 151-170 g/km of CO2. The government is trying to encourage people to purchase low-emissions vehicles that are better for the environment.

The above is what needs to be paid in the first 12 months. After this time period, a flat fee is paid each year. For vehicles with a list price of under £40,000, petrol or diesel cars pay £145 per year. For cars with a list price of over £40,000, you’ll need to pay an additional £320 per year, however this does not need to be paid if your vehicle is zero emission.

Do you pay road tax on electric cars?

As you’ll have seen from the tables above, any vehicle that has zero emissions and was registered after March 2001 doesn’t have to pay anything in road tax. As electric cars don’t have any exhaust emissions, they are exempt.

Other vehicles that are exempt include disability or mobility vehicles and vehicles registered or made before 1st January 1980.

However, you must still tax your vehicle even if you don’t have to pay. You can find out how to do this below.

How to road tax a car

You can tax your vehicle in a number of ways, including online, over the phone or in your nearest Post Office branch. In order to do this, you will need your vehicle’s logbook (also known as a V5C) and it must be in your name. Alternatively, you will need the reference number from a recent reminder letter sent to you by the DVLA.

Whichever method you choose, taxing your car is quite a straightforward process that doesn’t take much time at all. Once you’ve set up the tax, it will automatically renew each year so you don’t have to do it again. If your car is brand new, the tax may already have been prearranged by the dealer and paid for as part of the cost of the car, however, you should confirm this with them - you don’t want to be driving an untaxed vehicle. If they’ve organised this on your behalf, your logbook should arrive within a few days.

In the past, you may have received a tax disc that was to be stuck on your windscreen, displaying the date your tax was due to expire. These had been in circulation since 1921 and were provided as proof that you’d paid your road tax. However, they were abolished in 2014 because it was thought that the government could save £10m a year by no longer producing them. Therefore, you will no longer receive a tax disc to stick on your car’s windscreen.

Can I renew road tax without insurance?

When you renew or take out road tax using the ways outlined above, the DVLA will check their database to make sure that your vehicle has a valid MOT (if required) and is insured. If your vehicle isn’t insured, you cannot renew your road tax, so you must make sure that this is in place first. 

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