The Car tax, known as Vehicle Excise Duty or VED, can make up a sizeable portion of your car’s running costs. Age, purchase price, fuel type and CO2 emissions can all affect how much car tax you owe.
So, how does VED work? And how much is it, exactly, to tax my car?
As a rule, you have to pay car tax (VED) if:
The Driver and Vehicle Licensing Agency (DVLA) issues the official car tax rates. These are based on your car’s:
That said, some cars are exempt from VED. Whether you can get an exemption will depend on:
You don’t have to pay car tax on certain types of vehicle. These are:
You’re also exempt from paying car tax if you have a disability. In either case, you’ll need to fill in the car tax application, then claim the exemption.
You don’t need to pay car tax if you stop driving your car.
Yet, you’ll need to let the DVLA know your car is off the road. To do this, you have to file a Statutory Off Road Notification, or SORN. You can do this online, by phone or by post.
You don’t have to renew a SORN. It stays valid until you tax your vehicle again, sell it, scrap it or remove it permanently. You’ll also still be able to drive if you have a pre-booked MOT or other testing appointment.
Yet, you risk prosecution and a £2,500 fine if you’re caught driving for any other reason.
Car tax works differently, depending on the date you first registered your car. There are three possibilities:
If your car falls in this category, you pay tax based on engine size. The rates are:
In this case, the car tax rates are split into 13 different bands. Your car’s tax band depends on fuel type and CO2 emissions.
Vehicles that emit up to 100 grams of CO2 per kilometre fall in band A, which means they don’t pay any tax. At the other end of the spectrum, petrol or diesel vehicles that emit 255 grams of CO2 per kilometre or more fall in band M and pay a whopping £535 per year.
Here, car tax works in three stages:
Are all these different possibilities making your head spin?
No problem. You can also work out how much car tax you have to pay online. To do this:
You’ll automatically be shown the applicable tax rate for your car.
Easy peasy, right?