Car Tax: The Facts

Car Tax: The Facts
First introduced in the United Kingdom in 1888, car tax, or ‘Vehicle Excise Duty’ essentially allows the car to be driven on the road legally by the insured driver. Once a physical tax disc, now no physical paperwork is required.

It’s always an exciting time when you buy a new car. The thrill of driving the vehicle for the first shopping trip, or picking up your son or daughter from school can be exhilarating. It’s that ‘new car smell’ that everyone knows about, and it’s always been a great feeling.

But of course, there’s a few tasks that simply need to be done to be able to drive the vehicle.

One of these is your car’s tax, or ‘Vehicle Excise Duty’. This essentially allows the car to be driven on the road legally by the insured driver.

First introduced in the United Kingdom in 1888, they would usually be confirmed through a document, and proof of this for the car would have been a ‘tax disc’ seen at the windshield. Either in blue or red, it would show the expiry date of when the current road tax would run out for the vehicle.

The rules of vehicle tax have changed for certain cars, depending on the engine-size or even the type of car, such as hybrid and electric.

Why do I have to pay vehicle tax?

VED, otherwise known as car tax is put into a central Government fund. It is hard to say what exactly the money goes towards. It used to be that your car tax would be put towards road maintenence, however, this has changed and the Government now pay for road maintenance. 

With that, here’s some helpful points to make sure you’re up to speed with VED.

Car Tax Calendar

Length of Vehicle Tax

This is totally dependent on the driver, you can choose to pay car tax monthly, annually or every six months, whatever works best.

There are also rare times where vehicle tax may already be paid when purchasing a second-hand car. Even before you agree to take a look at it, you can check the vehicle tax status by checking here. It shows exactly when it’s due and when it was paid to give you a better idea of its status.

You will be sent a letter before it runs out to make you aware that it’s due for a renewal, but it always helps to have it in a calendar of some kind, just in case.

Cost of Car tax Form Screen Shot

Cost of Vehicle Tax

The cost depends on a few factors:

  • Engine Size

  • Emissions

Before 1st March 2001, the tax was based on the engine size only. However, following this, both factors were put into the cost. This was introduced by the government to make the driver aware of the emissions their car was creating, but was also the starting point where emissions for heavy goods vehicles were also taxed.

The cost is measured in thirteen bands for a car, from Band A to Band M. The link above will tell you exactly what Band it falls in, and it will give you a price to pay through direct debit, or in one go if desired.

Interestingly, any car that’s registered after April 1st 2013 will be subject to a reduced rate for the first year. For example, if a car was in Band F but registered after this date, the first year’s cost would be £140. But if it was before, it would be £160 to begin with regardless.

However, any diesel cars that don’t meet Real Driving Emissions 2 (RDE2) will be required to pay a higher rate.

Querying the tax cost can be confusing, but the government’s site makes it clear how much it will be, without having to check a table of thirteen bands.

However, if you need to change how you’re paying the tax, you can check this link and modify your payments.

Exemptions of Vehicle Tax

There are even exemptions for certain vehicles, from the rare types to the upcoming ones, but it always helps to check this page just in case.

The list includes:

  • Historic Vehicles created before 1st January 1980

  • Disabled Passenger Vehicles used by organisations for disabled people

  • Vehicles used for agriculture, horticulture and forestry

  • Electric Vehicles that strictly run on battery

  • Steam Vehicles

These should hopefully guide you in seeing what tax your vehicle falls into. With electric cars currently exempt, it does raise the question of whether they will be in the future when electric vehicles are a standard on the roads.

If you are looking to buy a specific car and you know the licence plate, there’s plenty of easy ways to see how much it can be to have it taxed again so you can enjoy using that new car on the road.