In the UK you need to pay vehicle tax if you drive or park on the road. But with changes announced in the 2023 Spring Budget, you may be unsure of how to tax your vehicle properly.
So, we’ve broken down the key information.
- What is vehicle tax?
- Is vehicle tax the same as road tax?
- How do I check if my vehicle’s taxed?
- Where can I find the registration date of my vehicle?
- What is the tax rate of my vehicle?
- What is the tax rate for vehicles over £40,000?
- Do I pay vehicle tax on my EV?
- Do I have to pay vehicle tax if I’m exempt?
- How do I pay my vehicle tax?
What is vehicle tax?
We’ll try to keep this one as simple as we can…
Vehicle tax contributes towards the funding of roads, infrastructure, and local projects – amongst other things. But it doesn’t just pay for that, as it goes into the government’s consolidated fund.
It’s easiest to think of your vehicle tax as a permit to use the country’s driving infrastructure. What you pay contributes to maintaining things like roads, but doesn’t cover it fully.
This confusion may be because drivers often call vehicle tax ‘road tax’.
Is vehicle tax the same as road tax?
This answer is a lot simpler – yes.
Because your vehicle tax contributes towards maintaining roads, it’s become colloquially known as ‘road tax’. Road tax isn’t something separate that you need to pay.
Vehicle Excise Duty (VED) is the official government term for vehicle tax. With all these terms floating about, it can all get a bit confusing. But, you can rest easy knowing that vehicle tax, road tax and VED are just different names for the same payment.
How do I check if my vehicle’s taxed?
Not sure if your vehicle’s taxed? It’s best to check, as it’s a legal requirement. If your vehicle isn’t taxed, you could be fined £80.
Complete the government’s simple check to see if your vehicle is taxed. All you’ll need is your vehicle registration number (aka your number plate).
Where can I find the registration date of my vehicle?
Before you look at what tax rate you’ll need to pay, it’s good to know your vehicle’s registration date. If you don’t know it off by heart, there are a few ways to check.
The registration date of your vehicle is the first date it was registered by any owner. So, if you’re not the vehicle’s first owner, be sure to use the first date logged.
If you have the V5C (that’s the vehicle’s logbook), the registration date will be listed. If you don’t have one, you can get a new V5C here.
You can also use the DVLA service to check the first date a vehicle was registered. This provides a lot of extra information about the vehicle as well, so it’s worth checking out.
What’s the tax rate of my vehicle?
Once you know your vehicle registration date, you can work out your tax rate.
If it’s a new car and you’re registering it for the first time, the tax in the first year will depend on the vehicle’s CO2 emissions. After the first year, it depends on the fuel type and vehicle price.
You can see the whole vehicle tax rate breakdown here.
What’s the tax rate for vehicles over £40,000?
From the second registered year of vehicle tax, if your vehicle’s listed price is over £40,000, you’ll pay extra.
Depending on fuel type and how you pay, this could bump your tax up to £572 a year. You’ll pay this for five years starting from the second year it’s registered. So, it’s worth looking at what you’ll pay in the last table on this page.
Do I pay vehicle tax on an electric vehicle (EV)?
One of the benefits of owning an EV this year is that you don’t need to pay any vehicle tax.
However, that’s changing.
From April 2025, EVs (as well as alternative fuel vehicles like HVs) will be required to pay vehicle tax. This is part of the government’s plan to equalise the system.
From April 2025, the first year of registration for an EV should have relatively low tax costs (the CO2 emissions will make sure of that). But from the second year, you can expect to pay a standard vehicle tax rate.
Do I have to pay vehicle tax if I’m exempt?
No, but you’ll still need to go through the process of taxing your vehicle. You’ll just be charged £0.
How do I pay my vehicle tax?
You’ll need your vehicle reference number to get started.
There are a few places you can find this:
- Your V5C (vehicle logbook)
- The green ‘new keeper’ slip for a vehicle you’ve just bought
- A ‘recent reminder’ (V11)
- A ‘last chance’ letter from DVLA
You can then fill out the vehicle tax registration form on the government’s website.
Or contact the DVLA.
And hey presto. You taxed your vehicle.
Oh, and if you’re also checking to see if your insurance is up to date, you can read our blog on everything vehicle insurance here.
We hope this was useful!
Rona