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How to Tax Your Car: Everything You Need to Know

Before you get behind the wheel of your car and drive away, you need to make sure it’s taxed. As this article will soon make clear, there are myriad reasons as to why taxing a car is mandatory. Failing to tax your car could land you with a potential fine, result in your car being clamped, or even seized by authorities.

So, what is there to know about the process of car tax? How do you go about doing it? What happens if you drive your car untaxed? And what are the penalties for doing so? Here’s everything you need to know; use the links below to navigate.

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How to Tax Your Car

When your car tax – also known as Vehicle Excise Duty – is up for renewal, you should get a V11 reminder letter. If you haven’t received this or you’ve lost it, then you can use the number in your V5C logbook. Alternatively, if you’ve just bought the car and don’t have this logbook yet, then you should have a number on V5C/2 supplement given to you by the previous owner.

Either way, you’ll need one of these numbers to tax your vehicle. Here, we provide a step-by-step guide on how to tax your car online, by phone and at the post office.

Taxing Your Car Online

  1. Go to the vehicle tax page on the Gov.uk website
  2. Enter your reference number from the document you used in step 1, then select Continue.
  3. Your vehicle details and tax status will be shown. If these are correct, select Continue. If not, press the cancel button to start again or call DVLA on 0300 123 4321 for advice.
  4. Select whether you would prefer to pay by card or by direct debit, then select Continue.
  5. If paying by direct debit you can choose to pay monthly, otherwise, you pay every 6 or 12 months.

Once you’ve confirmed your payment details, your car tax will be renewed right away. You’ll be given an application reference number, along with a confirmation text or email from the DVLA.

Taxing Your Car By Phone

You can also tax your vehicle over the phone by calling 0300 123 4321. You’ll need either the renewal reference number or V5C reference number, along with your credit or debit card details. Note, you cannot set up a direct debit through the automated phone service.

Taxing Your Car at the Post Office

The third option is to pay for your tax at the Post Office. Bring along your car’s V5C or V5C/2 along with a credit or debit card and you’re good to go. If you intend to set up a direct debit, then you’ll need your bank details too.

How Do I Pay for My Car Tax?

You can pay for your car tax in one lump sum, either by cash, cheque, debit or credit card. As above, you also have the option of paying via direct debit. Payments can be made either annually, bi-annually or monthly, but be aware there’s a 5% surcharge for biannual or monthly payments.

How Do I Know If My Car is Taxed?

If you’re unsure about the status of your vehicle’s car tax, then the best way to check is through the government’s vehicle enquiry service.

All you need is your car’s make and its number plate. Once you’ve entered the details, it’ll tell you when your tax is due for renewal as well as when your MOT is up. Additionally, if you have your V5C reference number with you, you can also get tax rates and other information about your car.

How Much is Car Tax?

The cost of your car tax will depend on the tax band your car falls into (more about this later). Cars in the lowest band A are currently exempt from paying any tax.

Use our guide below to find out how much tax you can expect to pay for your car.

Cars Registered On or After 1 April 2017

In the car’s first year, rates will change based on the carbon dioxide emissions of the vehicle.

CO2 emissions (g/km)

First year rate

First year rate for a diesel that does not meet RDE2

0

£0

£0

1-50

£10

£25

51-75

£25

£105

76-90

£105

£125

91-100

£125

£145

101-110

£145

£165

111-130

£165

£205

131-150

£205

£515

151-170

£515

£830

171-190

£830

£1240

191-225

£1240

£1760

226-255

£1760

£2070

Over 255

£2070

£2070

After the first year, cars with a list price under £40,000 have to pay the following for car tax:

CO2 emissions (g/km)

Electric vehicle

Alternative fuel

Petrol or diesel

0

0

0

0

1 – over 255

£0

£130

£140

For cars above £40,000, you’ll have to pay an additional £310 for the next five years. After five years, you’ll pay the standard annual rate depending on what fuel your vehicle uses.

For example, a pure electric car with a list price of over £40,000 would pay £310 (£0+£130) for the next five years.

The list price is the published price before any discounts at the first registration. Check the list price with your dealer so you know how much vehicle tax you’ll have to pay.

Cars registered on or after February 2001 but before 1 April 2017

The rate of tax you pay depends on the car’s official CO2 emissions and the type of fuel it uses. The rates are split into bands based on how many grams of carbon dioxide (CO2) a car emits per kilometre driven:

CO2 emission (g/km)

Total cost for 12 months

Up to 100

£0

101-110

£20

111-120

£30

121-130

£120

131-140

£140

141-150

£155

151-165

£195

166-175

£230

176-185

£250

186-200

£290

201-225

£315

226-255

£540

Over 255

£555

Cars registered before 1 March 2001

The tax rate is based on engine size only. There is one rate for engines up to 1549cc and one for over 1549cc.

Engine size (cc)

12 months rate

Not over 1549

£155

Over 1549

£255

Used Cars and Tax: How Does it Work?

Previously, transferring car tax was possible. But since paper tax discs are no longer in circulation, selling a car with a few months’ tax left on it is a thing of the past. Tax discs were scrapped in October 2014; the DVLA said this was a cost-cutting issue and that getting rid of printing and postage costs would save £10 million each year.

Today, however, whenever someone sells a car, any full months’ worth of tax is automatically refunded. So, when you buy a used car, it will be untaxed. By law, the car must be taxed at the point of sale and driving off without it could land you with a fine – which we’ll get onto later.

How Do I Get A Refund on My Car Tax?

If you no longer own your vehicle or it’s off the road, you can get a refund on any full month’s worth of remaining tax.

Let the DVLA know if any of the following applies to your car:

  • It’s been sold or transferred to someone else
  • It’s off the road. In which case, you’ll need a Statutory Off Road Notification (SORN)
  • It’s been written off by an insurance company or scrapped at a scrapyard
  • It’s been exported out of the UK
  • It’s registered as tax exempt

If, however, your vehicle is stolen, you’ll have to apply for the cancellation and the refund separately. Once you’ve contacted the DVLA in the event of any of these scenarios, your tax will be cancelled, as will the direct debit. You’ll automatically receive a refund by cheque for any full months left on your car tax.

To calculate this number, the DVLA will work out the remaining months left from the date they received your information. The cheque is then sent to the name and address on the logbook.

What Happens if I Don’t Tax My Car?

Is It Illegal?

By law, it’s an offence to drive a vehicle on a public road in the UK with no road tax, although there are some exceptions.

If you’re taking your car to a pre-booked MOT test, you can drive your vehicle on a road without it being taxed. Although the law doesn’t state how far you can travel, stopping off at shops, for example, or driving an unreasonably long distance, can be seen as you using the vehicle for other purposes. In which case, the exemption won’t apply.

Disabled drivers may be exempt from paying vehicle tax, while certain vehicles such as electric cars and historic motors can also be excused. That said, even if you don’t need to pay for it, you do still have to apply for vehicle tax.

Does My Car Need to be Taxed Even if it’s Not in Use?

Yes, even if a registered vehicle is simply being kept on a public road, it must be both taxed and insured. If you’re not driving or parking it on a public road, then you don’t need to tax the vehicle, though it must be declared SORN, as we mentioned earlier. If you’re going away for an extended period, or your car is being restored, then you may decide to do this. Note, that if a vehicle hasn’t been declared SORN, you still need to tax it.

Applying for SORN is free of charge. Just remember that once a car has been declared SORN, it can’t be driven on the road until it’s cancelled. Driving a car that has been declared SORN is a far worse offence than driving without tax. If you’re caught driving while a SORN still applies, you could face a fine of up to £2,500.

Are There Any Grace Periods for Paying Car Tax?

There are no longer any grace periods for car tax. When paper discs were still in existence, there used to be a five-day grace period to allow the new tax disc to arrive in the post. However, now that the process has moved online, the grace period has been axed. You need to have valid car tax from the moment you drive your vehicle on public roads.

What is the Penalty for Driving without Car Tax?

Since the DVLA runs monthly computer checks of all vehicles registered in the UK, it can identify those vehicles driving without car tax. If the system flags up your car, you’ll be landed with an automated letter and an £80 fine. You won’t get any points on your licence, and if you pay the fine within 28 days, you’ll receive a 50% discount.

Failure to pay the fine could result in prosecution, with the penalty increasing to a maximum of £1,000 if the case goes to court. The DVLA also has the power to clamp your vehicle until the correct amount of tax has been paid.

We hope you’ve enjoyed this article. Looking for more from Brindley Garages? Head here to check out more news from the motoring world, or whether you’re in the market for a new car, see how we can help at our homepage.

Added: 18 December 2019

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