What is road tax?

Road tax isn’t one’s favorite thing to pay, it’s frustrating sometimes when you have to pay your tax then you realize that it’s gone up again. And you can’t avoid paying either, as doing so would be illegal.

I always pay road tax but what does it even mean, why do I pay more tax than what others pay? If you’ve been searching for a road tax guide look no further. This article discusses everything you need to know about road tax.

What is road tax?

The VED or vehicle excise duty commonly know as road tax is a tax paid on a car to establish its right to use the roads. This tax is payable by all car owners on their vehicle whether it is driven or not. Although the display of task disc on the windscreen of cars was absolved on the 1st of October 2014, new tax bands have been established for cars registered after April 1, 2017. Car’s whose road tax has not been paid the owners end up paying huge fines and get three points on their license. In worse case scenarios your car may end up being towed, all this is as a result of failure to pay road tax. It is essential to get your pending road tax cleared up and updated. If you are getting a new car you also need to ensure the car has no outstanding road tax debt as well

How much is the road tax rate

Well, this depends on various factors. One of such factors is the date of registration. If your car was registered before march-1-2001 then the road tax rate you pay will be determined by the size of the engine. For any car registered after this date, the road tax rate will be dependent on the co2 emissions as well as the fuel type. To check the exact road tax your car needs to pay you would need information regarding your co2 emissions and to see if your car was registered during march 2001 and you can find this information on the V5C registration certificate also known as a logbook. Not all cars pay road tax, some cars are exempted from paying such tax. Examples of such cars are

Historic or classic cars that are 40 years and older.

Off-road car’s that are not used on the public road

Cars with disabled owners

And cars that produce 0-100 grams of carbon dioxide (co2)

Electric cars

These are the only cases that are exempted from paying road tax. When you are buying a car you need to ensure you know the annual cost of the road tax for that car. So car dealers can solve issues related to tax for you while some don’t care, so you may end up solving tax issues yourself. But overall make sure you get your car taxed as it would be illegal to drive one without tax.

How to get your car taxed

You can pay your road tax in 3 ways; In a post office, Going directly to the DVLA, Paying the road tax online, or via direct debit. Whichever method you prefer you can always have your tax paid. To pay your road tax online you would need a car registration number as well as your V5C reference number. If your car is new and you don’t have the v5C document you need to pay your road tax then you need to apply for a new V5C certificate or logbook.

You can also set up your bank account in a way that you’ll be getting a regular debit directly to pay your road tax all you need to do is go online or you could do it in a post office.

When do I need to pay my road tax?

If you bought a new car or used car or even your existing car, you need to pay road tax each year. You could have your car taxed by paying install mentally every month or you could pay the tax every six months upfront. You’ll be notified by the DVLA in a letter stating the fact that your car’s road tax is almost expired and you have to make new payments. This letter is usually issued three weeks before the road tax is about to expire.

Owning a car isn’t easy as the car adds extra bills to your budget. Maintenance, servicing, etc are some of the things that add extra cost to your budget and a car’s tax is one of those expenses you should always set a reminder on as it is very important. Having your car taxed isn’t just a walk-in the park as a car road tax depends on when the car was registered, the carbon dioxide co2 emissions, the engine size as well as the type of fuel the car uses.

What do the UK tax bands explain?

Depending on when the car was first registered, a lot is factors affect the tax bands of a car. Factors like engine size, co2 emissions, etc. A car must also have a valid MOT to pay for the car’s tax. If the MOT has expired then you cannot pay your road tax as no MOT equals no car tax. Cars that were registered as of March 1, 2001, the car tax rates were split into bands. These bands suggest that taxes are dependent on the co2 emissions produced so the lower the co2 emission of a car the lower the tax rate would be.

Cars that are classed as private light goods vehicles or private cars are those cars that were registered before March 1, 2001. These vehicles have a revenue weight of 3500kg. This system is very simple as cars whose engines weigh over 1549cc and less than 1549 cc are placed in two different categories. Cars whose engines weigh over 1549cc pay a road tax rate of £253 per annum and a sum of £129.25 every 6 months. Cars whose engine weight is less than 1549cc pay a road tax of £145 per annum or £79.75 every 6 months. You can pay through a direct debit or you can pay online through the government website but you pay the tax either way.

While cars that were registered before April 1, 2017, and after March 1, 2001, have a different tax band. Since March 1, 2001, the road tax rate has been split into thirteen bands. These splits are dependent on the car’s co2 emission. So if you have a car that produces zero co2 emissions pay no tax at all. It’s the lower your car’s co2 emission the lower the road tax rate. The government wants people to buy an efficient car, so they give a tempting offer, that is no first-year road tax on new cars that have been registered between April 2010 and April 2017 and sub 130g/km bands.

Road tax rates for alternative fuel cars pay ten euros less than cars that use fuel and diesel. These cars produce low carbon dioxide emissions as they run on biofuel, LPG, or CNG, and plug-in hybrids hence the reason for the low road tax rate.

  • For category A whose co2 emissions are up to 100 grams, the road tax rate paid is £0 annually.
  • For category B whose co2 emissions are 101-110 grams, they pay an annual road tax rate of £20 with a £0 first-year rate.
  • Category C, for cars whose co2 emissions are 111-120 grams, pays the annual road tax rate of £30 with a £0 first-year rate.
  • Category D car’s whose co2 emissions is 121-130 grams, pay an annual road tax rate of £110 with a £0 first-year rate.
  • Category D car’s whose co2 emissions is 121-130 grams, pay an annual road tax rate of £110 with a £0 first-year rate.
  • Category E, cars whose co2 emissions are 131-140 grams, pay an annual road tax rate of 130 euros with a £130 first-year rate.
  • Category F, cars whose co2 emissions are 141-150 grams, pay an annual road tax rate of 145 euros with £145 as a first-year rate.
  • Category G, cars whose co2 emissions are 151-16t grams, pay an annual road tax rate of £185 with £185 as a first-year rate.
  • Category H, cars whose co2 emissions are 166-175 grams, pay an annual road tax rate of 210 euros with £300 as a first-year rate.
  • Category I, cars whose co2 emissions are 176-185 grams, pay an annual road tax rate of 230 euros with a £355 first-year rate.
  • Category J, cars whose co2 emissions are 186-200 grams, pay an annual road tax rate of 270 euros with £500 as a first-year rate.
  • Category K, cars whose co2 emissions are 201-225 grams, pay an annual road tax rate of 295 euros with £650 as a first-year rate.
  • Category L, cars whose co2 emissions are 226-255 grams, pay an annual road tax rate of 500 euros with an £885 first-year rate.
  • Category M, cars whose co2 emissions are over 255g/km, pay an annual road tax rate of 515 euros with a £1220 first-year rate.

Tax rate bands for cars registered as at 2017

For cars whose price is over £40000, pay an extra tax rate of 310 euros annually on top of the standard rate for five years. cars registered after April 2017, their tax bands have the following tax bands.

Co2 emissions The first-year road tax rate The standard road tax rate
0 £0 £0
1-50 £10 £40
51-75 £25 £140
76-90 £100 £140
91-100 £120 £140
101-110 £140 £140
111-130 £160 £140
131-150 £200 £140
151-170 £500 £140
171-190 £800 £140
191-225 £1200 £140
226-255 £1700 £140
Over 255 £2000 £140

 

Road tax updates 2020-2022 for cars registered from April 1, 2020

Road tax rates are always fluctuating, not a year goes by without road tax rising in prior years but as of 2020, the road tax rate had a modest increase. Recent changes to the road tax as of 2020 for the first time utilized the WLTP system. This system is designed to give the government insight into the carbon dioxide emissions a car produces when driven on the road. The yearly road tax rates increase slightly but not drastically in addition to this new testing as caused by inflation. The yearly road tax of cars running on diesel and fuel as of 2017 was £150 but as of 2020 it increased to £155 so it wasn’t a huge difference. But still premium road tax of cars over £40000 running on petrol and diesel pay after five years of purchase was not applied on cars running on electricity (i.e electric cars). The yearly flat rate for hybrid cars had an increase of £5 as of 2020 so instead of the usual road tax rate of £140 they paid during 2017 the rate increased to £145. This flat rate also applied to other alternative fuel vehicles running on LPG, CNG, or biofuel. Other than these changes, road tax bands are the same as the system introduced in 2017.

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