Taxing a car

Avoid a £1,000 fine with the full guide to taxing a car

BuyaCar team
Jun 8, 2018

In the past few years, the way you tax your car has become quicker, but more complex. Some people have been caught out - especially those who gave their car to another family member. This is because this kind gesutre will cause the tax to expire automatically.

Below, we explain how to keep on the right side of the law.

How did the old system of taxing a car work?

Before 1 October 2014, motorists had to buy a tax disc and display it on their car’s windscreen. Discs were valid for six or twelve months. If the car was sold, it remained taxed as long as the disc was in date.        

How has the car tax system changed?

The tax disc has been scrapped: the only record of your car being taxed is now on an electronic database. You can check the details online, but there’s no reminder on your windscreen of when your car needs to be taxed.

Car tax is no longer transferred with a used car when it is sold or changes ownership - even if it’s registered to another family member.

It expires as soon as you notify the Driver and Vehicle Licensing Agency (DVLA) that the car has changed hands - you need to do this so the vehicle’s ownership documents are updated. Some of the unexpired tax will be refunded. If the new owner doesn’t tax the car themselves, then they could be fined up to £1,000.

How do I tax my car?

The simplest and quickest way is usually to pay online at You can also tax your car over the phone on 0300 123 4321 or, for that nostalgic feel, you can join the queue at one of the Post Offices that deal with car tax and hand the money over in person.

The amount that you pay will depend on the car tax rate that your vehicle is liable for. You can choose to pay for a year’s tax upfront and this can be renewed each year by Direct Debit if you like. If your car costs £100 or more to tax each year, then you’ll also have the option of paying for six months’-worth at a time, which works out to be 10% more expensive, or in monthly instalments by Direct Debit, which costs 5% more in the long run than paying upfront.

If you’re the new owner of a car, you will need to tax the car before you drive it. For this, you’ll need the green section of the car’s logbook, known as the ‘new keeper’s details’ slip or V5C/2.

As an existing owner, you should receive a reminder from the DVLA around a month before your car tax expires. This document, known as the V11, has the information that you need to re-tax the car. Alternatively, you can use the reference number on the car’s logbook (known as a V5/C document).

What do I need for taxing a car?

You’ll need a reference number from one of four documents issued by the DVLA. Enter this online, and your vehicle’s details will pop up, along with the date that its tax expires.

One of these is the V11 reminder letter that you’ll be sent around a month before your tax is due to expire. It’s made up of 16 digits.

Alternatively, you can use the 11-digit reference number on your V5C logbook.

If you forget to renew your tax, you may be sent a Last Chance warning letter. This will also have a number that you can use to renew your car’s tax.

New owners must use the 12-digit number that’s on the green new keeper slip, which is known as the V5C/2.

Your vehicle must be insured and - if it’s over three years old - have a valid MOT. These details are recorded electronically and can be checked by the DVLA, so there’s no need to send in any documents when you tax your car online.

If you decide to pay for your car tax at a Post Office, then you may need your MOT certificate.

How much does it cost to tax a car?

New rules were implemented last year for new cars registered from 1 April 2017. Only fully electric cars emitting 0g/km CO2 are exempt under the new car tax rules. In their first year, cars are taxed at different rates rising to a maximum of £2000 for cars emitting more than 256g/km CO2. In their second year, all cars are taxed at a flat rate of £140. In addition, from their second year, cars costing more than £40,000 will pay an annual supplement for five years of £310.

Previously, Car tax rates were determined by the amount of carbon dioxide a car emits, measured in grams per kilometre (expressed as g/km CO2). Rates ranged from £0 for cars emitting no more than 11g/km CO2 to £515 for those emitting more than 255g/km.


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