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What is car tax?

Car tax is another name for Vehicle Excise Duty (VED) and it is levied on most kinds of vehicle that use public roads in the UK. Charges depend on the car's engine size, its fuel type and CO² emissions.

Vehicles that are not tax-exempt are required at all times to display a tax disc, which cannot be transferred between vehicles. Car tax is sometimes referred to as 'road' tax, although the tax applies to the vehicle, not the use of the road.

How much does car tax cost?

Vehicles used by disabled people, classic vehicles, and those used only for agriculture may not need to pay car tax. If you are unsure whether you will need to pay tax for your car the UK Government website has the complete list of vehicles that are tax-exempt.

Car tax can either be paid annually or every six months, with the yearly rate ranging from costing nothing to over a thousand pounds. Cars registered before 1st March 2001 are taxed according to their engine size, while any registered after that date are rated by their fuel type and CO² emissions. The government's vehicle tax rate tables can be used to calculate the amount you will need to pay. If you are not sure what your car's emissions are, check its V5C registration certificate or visit the Vehicle Certificate Agency online.

If you are thinking of buying a car, keep in mind that the bigger the engine size, the more likely you will have to pay higher car tax and higher car insurance payments.

Any car that is being kept exclusively on private land does not need to pay tax, but the vehicle's registered keeper must complete a SORN to inform the DVLA that it will not be used on public roads. For more information see our guide to declaring a SORN.

If you do not pay for, or display, your tax disc and have do not have a SORN the DVLA will automatically fine you. Earlier payment may give you a discount, but fail to pay and you could be fined up to £1,000 and ordered to pay all back duty owed since the car was last taxed.

How to pay car tax

To tax your car you will need to prove that it is insured and if it is more than three years old, that it has passed its MOT.

You can pay your car tax online if you are the registered keeper and have either your reminder letter (V11) or the car's registration certificate (V5C). To renew or pay your tax at the Post Office, you will need to check that the branch is a vehicle licence-issuing one and be sure to bring your insurance certificate and a valid MOT (if needed).

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