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Understanding UK Car Tax Bands: A Comprehensive Guide

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When it comes to owning a car in the United Kingdom, there are several costs to consider beyond the initial purchase price and fuel expenses. One such cost is car tax, also known as Vehicle Excise Duty (VED), which is imposed on vehicles registered in the UK. The amount of tax you pay depends on various factors, including your vehicle's CO2 emissions and fuel type. To make sense of this system, let's delve into the UK car tax bands and how they impact vehicle owners.

Understanding UK Car Tax Bands:

Take a look at the table below to get an idea of what each car tax band means.

Rates based on carbon dioxide emissions in the first year

Car tax band CO2 emissions Petrol and diesel cars that meet the RDE2 standard All other diesel cars Alternative fuel cars
A 0g/km £0 £0 £0
B 1 to 50g/km £10 £30 £0
C 51 to 75g/km £30 £130 £20
D 76 to 90g/km £130 £165 £120
E 91 to 100g/km £165 £185 £155
F 101 to 110g/km £185 £210 £175
G 111 to 130g/km £210 £255 £200
H 131 to 150g/km £255 £645 £245
I 151 to 170g/km £645 £1,040 £635
J 171 to 190g/km £1,040 £1,565 £1,030
K 191 to 225g/km £1,565 £2,220 £1,555
L 226 to 255g/km £2,220 £2,605 £2,210
M Over 255g/km £2,605 £2,605 £2,595

How much is my car tax going to cost me in 2023? 

As you can see above, the road tax you are required to pay depends on the year your car was first registered and the type of fuel it runs on. Electric cars and certain older petrol and diesel cars are eligible for exempt VED, meaning they do not have to pay any tax. However, if your car was registered after April 2017, you can expect to pay an annual fee.

Why do I have to pay VED or car tax? 

The VED you pay contributes to the upkeep of the road infrastructure, and it is a mandatory payment unless your car has a Statutory Off Road Notice (SORN) or qualifies for specific exemptions. 

How is my car tax monitored? 

The management of VED is now facilitated through an electronic database.

Instead of relying on physical tax discs, like in the past, there is now a network of Automatic Number Plate Recognition (ANPR) cameras. These cameras are strategically positioned along the roadside or within police vehicles.

The ANPR system effectively communicates with the DVLA database, which maintains comprehensive records of both taxed and untaxed vehicles. This seamless exchange of data ensures accurate monitoring and enforcement of VED compliance.

When is my car tax due? 

As a vehicle owner, you will receive a timely notification prior to the expiration of your tax, which is consistently due at the conclusion of a specific month.

To clarify, if your vehicle is taxed for a full 12-month period starting from 1st January, you must renew it before December concludes.

You have the option to tax your car for either six or twelve months.

It's important to note that as soon as you take ownership of a car, you become responsible for road tax. However, if you make a wise purchase of an efficient new vehicle, the cost might be more affordable than you anticipate. In fact, with careful selection, it is possible to pay no road tax at all…

How do I pay my road tax? 

To complete the process, you will require a reference number found on one of the following documents: a recent reminder (V11), a 'last chance' warning letter received from the DVLA, a vehicle logbook (V5C) registered in your name, or a green new keeper supplement (V5C/2) accompanying a recently purchased vehicle.

The online system is user-friendly, and you have the option to make payment using a debit card, credit card, or via direct debit.

It's important to note that if you choose to pay via direct debit, there are additional charges associated.

If you prefer not to pay online, you can opt to contact the DVLA's 24-hour service at 0300 123 4321. However, please note that direct debit cannot be processed over the phone.

Alternatively, for those who appreciate more traditional methods, vehicle tax can also be paid in person at a Post Office that handles vehicle tax. 

Can you be exempt from paying car tax? 

Yes, there are certain situations where an individual doesn’t have to pay vehicle tax. However, you do have to apply for these exemptions. You can apply for your exemption on the Gov.uk website, right here. Find out more about the eligibility criteria here

What happens to your road tax once you have sold your car? 

Since 2014, you cannot transfer unexpired tax between registered keepers. A new owner has to tax the car themselves before driving it, even before driving it home. If you are a seller, you can get your vehicle tax refunded back to you, so make sure you let the DVLA know about the sale.

Not happy with your car tax band?

It could be a good time to sell. If you want a smooth selling experience that offers competitive prices, convenient collections, and fast payments, you should Sell2Swansway. Get your valuation now.

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Holly Harris

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