A quick guide to UK road tax

If you’re new to the UK and planning to drive a vehicle when you’re here, you’ll need to make sure you’re paying road tax. So what is road tax? How do you pay for it? And how much is it? 

Our quick guide to UK road tax tells you everything you need to know.

What is road tax?

Also known as Vehicle Excise Duty, road tax is an annual tax on vehicle ownership. It applies to cars, lorries, vans and motorcycles that are used on roads.

Road tax isn’t something new. In fact, it goes as far back as the late 1800s, when motor vehicles first came onto the scene.

The money raised by the government from Vehicle Excise Duty is significant. In fact, road tax raised over £6.5 million in 2019/2020 alone. This money is used to help fund public services.

How much is road tax?

The price of road tax depends on the band of your vehicle and whether you’re exempt. For example, some disabled drivers are exempt from paying road tax altogether.

Bands are governed by when your car was registered and its CO2 emissions. If your vehicle is high-polluting, you can pay more than £1,000 a year.

Vehicles made before March 2001 are taxed on engine size, while cars made between 2001 and 2017 are taxed on the car’s official CO2 emissions. So if your car is 15 years old and has high levels of CO2 emissions, you’ll pay more for your annual road tax. This is because road tax is designed to penalise high-polluting vehicles. 

If your car was registered after 2017, you’ll pay tax based on your emission level for the first year. This is usually included in the on-the-road price. After that, it’s a flat annual rate of £150. 

Driving a diesel car? You’ll have to factor in an extra tier for taxation. And if your car is an electric vehicle (EV) or is over 40 years old, you won’t have to pay road tax at all.

Click here for more details about vehicle tax rates.

How do you pay road tax?

Prior to 2014, vehicle owners were issued a ‘tax disc’ to display on their car as proof of paying road tax. But then the system was moved online. Now, you can pay your road tax electronically and you won’t need to display a tax disc.

To tax your vehicle, simply go over to the Tax your vehicle Gov.uk page. You’ll need the reference number from your vehicle log book (V5C), your V11 reminder letter or your green ‘new keeper’ slip, which you’ll get whenever you buy a new vehicle.

You must tax your vehicle even if you don’t have to pay anything (if you’re disabled, for example).

Road tax can be paid for by debit or credit card, or direct debit.

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