Road tax, a.k.a vehicle excise duty, is something you’re probably familiar with if you own and drive a car in the UK. Pretty much everyone needs to pay road tax in some form, with very few exceptions to this particular rule.
You need car insurance to tax your car though. So if you’ve just bought a new set of wheels and you haven’t chosen an annual policy yet, you can use temporary car insurance to tax your car while you shop around.
But what exactly is road tax? Why do we pay it? What happens if we don’t pay it? Are there any legitimate ways we can avoid it? Read on for answers to all of these questions and more.
What is road tax in the UK?
Basically, road tax is an annual charge that drivers in the UK have to pay to use public roads. The amount of road tax you have to pay depends on various factors, but generally, if your car is particularly emission-heavy, you’re likely to pay more. Someone driving a diesel will probably pay more than someone driving a hybrid car, for example.
For cars registered after 1 April 2017, the first-year rate of road tax is based on their CO2 emissions. Rates range from £0 for some zero-emission cars (finally – something free!) to an eye-watering £2,365 for cars emitting more than 255g/km of CO2 (yikes!).
If your car was registered before 1 April 2017, then the rates are based on fuel type and emissions and range from nothing to £630. So slightly less, but still an expense you’ll probably want to budget for. We know – it’s not fun.
If you have an older car, as in a car registered before March 2001, you’ll typically only need to pay between £180 to £295, because your road tax will be based purely on your engine size.
Some cars are exempt, meaning you won’t have to pay tax, but you’ll still need to “tax” the car online. Checking whether your car is taxed is super easy to do. Check this article to find out if your car is taxed.
Why do you pay road tax?
We’ll forgive you if you think road tax is used for road upkeep. Historically, that’s exactly why it was introduced. Roads were meant to be self-financing and road taxes were used to build and maintain roads.
But, that changed in the mid-30s, and since then, road tax is paid into the general Treasury fund. It’s not ring-fenced for road maintenance, so if you’re constantly cursing the state of the roads and wondering where your hard-earned road tax money is going, well… that’s up to the government.
Instead, your road tax, or vehicle excise duty, is used to pay for all sorts of government projects. And yes, some of your funds will help improve roads and infrastructure. But road tax is now simply a tax we pay for the right to keep our cars on public roads in the UK.
What happens if I don’t pay road tax in the UK?
Road tax isn’t optional unless you’re exempt. Not paying it means getting fined, potentially facing court action and even having your car clamped or impounded. It’s not pretty.
The DVLA doesn’t have to spot your untaxed car on the road to take action. If you don’t tax it and haven’t notified them via SORN (not sure about SORN? Why not read all about SORN in our handy article), then that’s an automatic £80 fine right there.
So what happens if you really push the boundaries and don’t pay up? You could find yourself dragged to court where they could dish out a penalty of up to £1,000. That’s one lesson we all want to learn without actually having to experience it first-hand!
Bottom line: make sure you keep up with your road tax payments or SORN your car if you’re not planning on driving it.
Which cars are road tax free in the UK?
You have to tax your car unless you’ve SORN’d it. But while you do have to tax it, you might be exempt from paying tax.
Cars made before 1982
Cars made before January 1, 1982 are considered historic so you won’t normally have to pay road tax on them. So if grandpa has an old-school classic car in his garage, you’re in luck! That is, if he’ll let you have it.
But don’t worry if your wheels are a bit newer than that, as there is still a chance you could be exempt from paying.
Cars used by disabled people
Some disabled people can claim a road tax exemption too. You’ll need to meet the eligibility criteria to apply though. This usually means you’ll need to be in receipt of disability benefits and the car will need to be registered in your name too. You can apply for the exemption when you tax your car.
Some electric cars qualify for tax exemptions too. As long as the electricity for the car comes from an external source, an electric battery, or a hydrogen fuel cell, you could bag an exemption.
But this exemption is only temporary. New electric cars registered from April 2025 with a value of £40k or above won’t be free to tax.
Hybrid cars also aren’t included. But, you’ll generally pay lower rates if you drive a hybrid. You can check vehicle tax rates here.
So there you have it – hopefully those exemptions can provide some relief when it comes to dealing with road tax if you’re eligible. Or at least help you budget for your next car.
Is car insurance valid without tax?
Your car insurance policy might still be valid if you haven’t taxed your car. Having car insurance is actually a requirement to tax your car in the first place. So you’ll need to arrange an insurance policy before you can tax your car.
Once you’ve done both, you’re usually good to go assuming you have a valid MOT and your car is roadworthy.
Where your car insurance might be invalidated though is if you drive your untaxed car. It’s illegal and insurers don’t take too kindly to people who break the law. If you need to claim after an accident in an untaxed car, you might find your insurer refuses to pay out altogether.
In short, you can insure your untaxed car because car insurance is a prerequisite for road tax purposes. But you can’t drive your newly insured car without taxing it as you’ll likely invalidate your policy.
So there you have it – the complete guide to road tax in the UK. If you’ve just bought a new car and you’re wondering whether you owe tax, it’s easy to check online. And you definitely need to tax it anyway even if you’re planning on applying for an exemption.
But, you need car insurance to tax your new purchase. If you haven’t arranged an annual car insurance policy just yet, you can always take out a temporary policy instead. That’ll cover you long enough to tax your car and shop around for an annual policy too.
With Zixty, for instance, policies last anywhere between an hour and a few weeks, and can be arranged in minutes. It’s a super flexible way to tax your car and find the right annual policy.