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Vehicle Road Tax (UK)

Every vehicle on the road in the UK must have up to date road tax. This used to involve purchasing a “tax disc” and displaying it in the windscreen, but tax discs are no longer required and road tax is managed online. As soon as a vehicle is purchased or transferred, the new registered keeper (as per the registration certificate, or V5C document) is responsible for taxing the vehicle.

The amount of tax you pay depends on the tax band a vehicle is assigned. Vehicles registered before 1st March 2001 are assigned a tax band based on their engine size. Vehicles registered after 1st March 2001 are assigned to a tax band based on their CO2 emissions, which means cars that are better for the environment are cheaper to tax. Brand new cars may have a different tax rate for the first year depending on the tax band they’re in.

If a vehicle is not being used and is not being parked on the public road it can be declared as such by issuing a “SORN”, or Statutory Off Road Notification, to the DVLA (Driver and Vehicle Licensing Agency). Tax is not due when a SORN applies. When the vehicle needs to be used on public roads again it must be taxed according to its tax band.

Payment

You can pay for road tax annually, monthly or every 6 months - all by direct debit. You can also pay annually as a single payment if you’d prefer.

When you notify the DVLA that you’ve sold, transferred, exported, scrapped or declared the vehicle off road, you’ll be refunded any outstanding tax. If you have a direct debit set up it’ll be cancelled automatically.

Tax is only refunded for each whole month that’s outstanding, so if you’ve paid for a year’s tax and you sell a car on the 15th April you’ll only get refunded for tax pro rata from 1st May onwards. The new keeper must tax the vehicle from the 1st of the month, even if they only become the keeper from the 15th.

Going on Holiday?

If your vehicle is parked on a public road and the tax is due to expire while you’re away on holiday or unable to renew the tax, you must renew the tax before it expires. You can renew tax up to two months in advance, and you must renew it before it expires.

Exemptions

There are some cases where a vehicle is exempt from road tax. Even if your vehicle is eligible for free or reduced rate tax, you still need to apply to tax it when it’s due.

Disabled people

Vehicles used by disabled people may be exempt from vehicle tax. The disabled person must receive the higher rate of Disability Living Allowance, the enhanced rate of the Personal Independence Payment, or the War Pensioner’s Mobility Supplement. Also, the vehicle needs to be registered in their name, or the name of their nominated driver. The exemption of vehicle tax cannot be used solely by a nominated driver.

Disabled people who receive the PIP standard mobility component can receive a 50% reduction in the road tax amount.

Vehicles that are used by organisations providing transport for disabled people are also exempt.

Electric vehicles

As long as a vehicle is powered from an external power source or a battery that is not connected to any source of power when the vehicle is moving, the vehicle can be exempt from vehicle tax. This does not include hybrid cars, such as those that switch between a petrol engine and an electric motor.

If an electric vehicle is eligible for exemption it will be in the lowest tax band, so no tax will be charged.

Agricultural vehicles

Vehicles used for agriculture, horticulture and forestry are exempt from road tax. This includes tractors and light agricultural vehicles used off road. It also includes vehicles used for short journeys that don’t exceed 1.5Km on public roads between land that is occupied by the same person.

Other vehicles

Mobility scooter, powered wheelchairs and other vehicles that are legal to travel on public roads but limited to a maximum speed of 8mph and fitted with a device limiting them to 4mph on footways are exempt. Mowers that are designed and manufactured solely for the purpose of cutting grass are also exempt. Steam powered vehicles are also exempt from road tax.

Classic and heritage vehicles are exempt from road tax, as long as they were registered before 1st Janurary 1975.

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