Guide to car tax

Everything you need to know about car tax

Taxing your car is a must-do if you own a car. Its proper name is Vehicle Excise Duty (VED) but people also call it road tax, car tax or vehicle tax.

It’s a legal requirement, just like getting car insurance. Your VED goes towards the maintenance of the roads and you must pay it, unless your car has a Statutory Off Road Notice (SORN) or a handful of other exemptions.

Here’s how to find out if your car is taxed and how the system works.

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car tax

Do I need to tax my car?

For most car owners, you’ll need to pay car tax each year or when you buy a new car. This also applies to other vehicles like vans and motorhomes.

Who is exempt from car tax?

There are a few scenarios where car owners are exempt from paying. These include if you:

  • Have registered your vehicle as off-the-road (SORN)
  • Own a brand new car that produces 0 grams of carbon dioxide (CO2) emissions and cost less than £40,000
  • Own a car registered between 1 March 2001 and before 1 April 2017 that produces up to 100 grams of CO2 per kilometre driven.
  • Own a ‘historic vehicle’ - a vehicle that’s 40 years or more old

You also may be exempt if you have a disability, for example if you:

  • Have an invalid carriage, such as a mobility scooter
  • Receive War Pensioners’ Mobility Supplement
  • Receive the higher rate of the mobility component of Disability Living Allowance.

Even if you have nothing to pay, you still need to register your car for tax exemption with the DVLA.

How do I check if my car is taxed?

It’s easy to check whether your car needs to be taxed. Just pop your registration number into this car tax checker.

The tool will tell you if your car has been taxed and when it’s next due to be taxed.

When is my car tax due?

Your car needs to be taxed every year or when you buy a new or used car. You can find out when it’s due using our car tax checker.

You can choose to pay your car tax in 1 of these ways:

  • Annual lump sum (this is the cheapest option)
  • Six-monthly lump sum
  • Monthly instalments via direct debit

If you choose a lump sum, you’ll have to remember to make the payment at the right time.

If you have a monthly direct debit, the payments will automatically come out of your bank account each month. However, you’ll need to check whether it auto-renews each year, and you’ll need to set it up again if you buy a new car.

How much is my car tax?

How much car tax you pay depends on the car’s level of CO2 emissions and how old it is.

Car tax is higher for more polluting cars, like older diesel cars. You’ll pay less tax on newer petrol cars, hybrids and electric vehicles. These have lower tax rates to encourage car owners to choose greener vehicles.

The amount you pay depends on when the car was registered:

  • On or after 1 April 2020: taxed on the car's official CO2 emissions, with a higher rate if the car doesn’t meet the Real Driving Emissions 2 (RDE2) standard.
  • On or after 1 April 2017: only the first year rate is based on CO2 emissions.
  • Between 1 March 2001 and 1 April 2017: taxed on the car's official CO2 emissions.
  • Before 1 March 2001: taxed on engine size.
  • More than 40 years ago: these historic vehicles are exempt.

Find out which band your car falls into with our guide to car tax bands.

How do I tax my car?

The simplest way to tax your car is to do it online on the government’s website:

You’ll need a reference number from one of these documents:

  • A recent reminder (V11) or ‘last chance’ warning letter from the DVLA.
  • Your vehicle log book (V5C) which must be in your name.
  • The green ‘new keeper’ slip from the log book if you’ve just bought your car.

You can choose whether to pay monthly or in a lump sum and can pay via credit card, debit card or direct debit.

If you prefer to do it in person or you’d like a hand filling out the forms, you can also pop into a participating Post Office to get help.

How do I tax my car while waiting for the log book (V5C)?

If you’re buying a new car, you might not have the log book yet. But you still need to get your Vehicle Excise Duty in place before you drive the car away.

If you're buying a second-hand car:

If you’ve bought a second-hand car, any reputable dealer should help you to sort out the car tax.

If you're buying a new car:

If you’re buying a brand new car, the dealer will usually arrange the car tax. The full price of a new car usually includes the first year’s tax and the new registration fee, so you won’t have to sort these out yourself. The dealer will give the DVLA proof of your name and address along with details of the car.

If you don’t have your V5C for whatever reason, you can get your car tax at the Post Office. You’ll just need to apply for a new V5C at the same time, which costs £25.

Can I tax my car without insurance?

No. When you tax your car, the DVLA checks official databases to make sure that the car has a valid MOT and insurance. It’s a legal requirement to have all 3 for your car.

If you’ve just bought a new car, update your car insurance with the details of your new car before you tax it. That way, your insurance will be correct when the DVLA does its checks.

The only time when you don’t need car insurance is if you register your car as off the road (SORN). In this case, you don’t need to tax your car either.

How do I get a refund on car tax?

Car tax doesn’t get transferred when you buy or sell a car. If you’re buying a used car, you’ll need to tax it afresh - even if the previous owner’s tax hasn’t run out yet.

If you’re selling a car, you can claim a refund for any full months of tax that are left. That means if you sell your car on the first day of the month, you’ll lose the tax for that whole month. But you’ll get a refund for any other months that are left. 

You can also get a refund in other circumstances, like if your vehicle has been written off, scrapped or stolen.

To claim a refund, you’ll need to cancel your car tax by telling the DVLA that you no longer have the car or it’s off the road. They’ll then send you a cheque for the refund.

You can tell the DVLA that you’ve bought, sold or transferred a vehicle here:

What happens if I don’t tax my car?

The DVLA runs monthly checks on its database to flag up any cars that don’t have tax but aren’t declared SORN. 

If your car’s flagged, you’ll get a warning letter in the post. If you still don’t tax your car, you’ll get an £80 fine, which reduces by half if you pay within 28 days. This fine could go up to £1,000 (plus court fees) if you don’t pay the fine and the case goes to court. 

The police can issue you a Fixed Penalty Notice of £1,000 on the spot if they stop you in your car and find you don’t have tax.

Published: 2 June 2020 | Updated: 2 June 2020 | Author: The AA

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