Taxing a car

Navigate the complexities of Vehicle Excise Duty with this comprehensive guide to taxing a car

BuyaCar team
Apr 17, 2019

Taxing a car can be a complex business – there are lots of different rates depending on the type of vehicle, its age, and even how you pay for it. Below, we explain how to keep your car correctly taxed.

How do I tax my car?

The simplest and quickest way is usually to pay online at www.gov.uk/vehicle-tax You can also tax your car over the phone on 0300 123 4321, or you can pay in person at one of the Post Offices that deal with car tax.

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 your car costs £100 or more to tax each year, then you’ll also have the option of paying for six months 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 it 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. If you pay your car tax by Direct Debit, however, you will not receive a reminder as your tax will be renewed automatically. If you do get a reminder, known as the V11, it will have 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 to tax a car?

To tax 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 11-digit reference number on your V5C logbook or the V11 reminder letter that you’ll be sent around a month before your tax is due to expire if you don’t get an automatic renewal via Direct Debit. It’s made up of 16 digits.

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?

For vehicles registered from 1 April 2017, Only fully electric cars emitting 0g/km CO2 are exempt under the latest 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 £145. In addition, from their second year, cars costing more than £40,000 will pay an annual supplement for five years of £310..

Car tax rates for cars registered between 31 March 2001 and 1 April 2017 are determined by the amount of carbon dioxide a car emits, measured in grams per kilometre (expressed as g/km CO2). Rates range from nothing for cars emitting less than 100g/km CO2 to £570 for those emitting more than 255g/km.

For cars first registered before 1 March 2001, the rates are based on the size of the engine. If your car’s engine is smaller than 1549cc, the rate is £160 per year. If it’s larger than 1549cc, the rate is £265 per year. 

 

How is car tax recorded?

The old car tax disc system (above) was scrapped back in 2014. Now, 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 also 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.

 

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