Car tax – Frequently Asked Questions

Owning a car is a great convenience and a ticket to freedom for many, but there is no doubt that car ownership comes with a lot of jargon and responsibility, such as paying tax. We know there are a lot of questions about car tax, so we thought we’d break them all down for you here.

A vehicle tax reminder document of a desk with car keys and money.

What is car tax?

Car tax, otherwise known as road tax and Vehicle Excise Duty (VET), is a type of tax that covers the majority of vehicles making use of public roads.

How is car tax calculated?

Many vehicles require you to pay a higher amount of tax than others. The amount of tax you’ll have to pay on your vehicle depends on a few things. Inflation will play a role in your payments, and so will your vehicle’s registration date.

For vehicles registered after 1 March 2001, your car tax will be calculated on its fuel type and level of CO2 emissions. If your vehicle was registered before 1 March 2001, your tax will be calculated upon the size of the engine.

Additionally, if you bought your vehicle for more than £40,000 – and it isn’t zero emissions – you will have to pay an extra £325 a year. This additional amount is payable for five years from the second time the vehicle is taxed.

Can you pay for car tax monthly?

Yes – you can pay your car tax either annually, every six months, or monthly via Direct Debit.

Aside from the first payment – which will vary – your car tax will be taken out on the first working day of the month, so it’s good to make sure you have enough money in the bank ahead of this date.

How many months do you pay car tax? 

You pay for 12 months of car tax on your vehicle, but it is up to you whether you do this on a monthly, six monthly, or annual schedule. If you have the means to pay the whole year upfront, you will pay less overall due to the removal of the five percent surcharge.

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How do I know when my car tax is due?

It’s easy to check when your car tax is due – all you have to do is head to DVLA’s site and enter your car registration. This will tell you when you need to pay your car tax, if your vehicle has a valid MOT, and when its next one is due. While you’re doing this, it’s best practice to keep updated with the latest MOT and driving law changes.

How often do I need to renew my car tax?

If you have a Direct Debit, your payments will auto-renew when your tax runs out. You’ll receive a letter or email informing you of when this is due to take place, and it’s important not to tax your vehicle again when this happens, as you will be charged twice.

If you don’t have a Direct Debit, you will receive a letter or email explaining when your car tax is due for renewal.

Are certain cars exempt from paying car tax?

Zero emission vehicles are exempt from car tax payments, as are some that produce only very low emissions.

Electric vehicles run purely on batteries and therefore don’t produce any emissions. As car tax is based heavily upon CO2 emissions, owners of cars that produce no or only a small amount of CO2 will still have to tax their car but they won’t have to pay a bill.

If your vehicle was registered before 8 January 1980 and isn’t used commercially or for hire or reward, you can apply to stop paying car tax. However, it’s important you continue to tax the vehicle, even if you don’t have to pay for it.

Eligible vehicles include cars, vans, motorcycles, tricycles, private heavy goods vehicles (HGVs) that aren’t used for training purposes or for transporting goods, mobile cranes and pumps, road rollers, works trucks, digging machines, agricultural machines, mowing machines, snow ploughs, gritting vehicles, electric vehicles, and steam vehicles.

Vehicles used by a disabled person may also be eligible, as well as disabled passenger vehicles, mobility scooters, and powered wheelchairs.

Am I exempt from paying car tax?

If you are a disabled person, you may be exempt from paying car tax. Eligibility covers recipients of the higher rate mobility component of Disability Living Allowance (DLA), enhanced rate mobility component of Personal Independence Payment (PIP), War Pensioners’ Mobility Supplement, and Armed Forces Independence Payment.

However, the vehicle must be registered in the name of the disabled person or their nominated driver, and only used for the disabled person’s needs, rather than those of the nominated driver.

What happens to my car tax if I get rid of my car?

If you sell or scrap your car, must inform the DVLA. You can cancel your car tax by telling the DVLA that you no longer have the vehicle – you will then receive a refund for any full months of remaining payments. This also applies if you’ve registered it as off the road through a Statutory Off Road Notification (SORN).

What happens if I don’t pay car tax?

Not paying your car tax will result in an £80 fine and a bill for all missing payments. Not paying this fine could result in either vehicle clamping, crushing, or having your details passed onto a debt collection agency. It is illegal to drive your vehicle until you have taxed it.

Why choose Scrap Car Comparison to scrap your vehicle?

Here at Scrap Car Comparison, we work with vetted and professional buyers who have all been checked for quality of service and customer satisfaction ratings.

When you enter your vehicle’s registration and your post code into our Scrap Car Calculator, you can be certain that you will receive quotes from trusted and reliable buyers who can scrap your car in a hassle-free way.

All of our scrappage quotes are guaranteed prices with no hidden charges, and you will also get free collection from our professional buyers. You can even choose to donate some or all of the money from your scrap car to charity.

To see what you can get for your scrap car from local and vetted buyers in your area, use our Scrap Car Calculator or get in touch with our UK experts on 03333 44 99 50.

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