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Road Tax – What is Vehicle Excise Duty (VED)?

Road tax – what is vehicle excise duty (VED)? You’ve no doubt heard about taxing your car. This is commonly referred to as car tax or road tax, but its actual title is vehicle excise duty (VED). Getting your car taxed is your…

Sean O'Neill

Road tax – what is vehicle excise duty (VED)? 

You’ve no doubt heard about taxing your car. This is commonly referred to as car tax or road tax, but its actual title is vehicle excise duty (VED).
 
Getting your car taxed is your responsibility and something that needs to be done every year or six months, depending on how frequently you choose to pay. Even if your car’s exempt from paying anything (in other words, zero-rated), you still need to sort out the paperwork.
 
Here we’ll look at what you need to know about VED, such as how to tax your car, what happens when you buy or sell, which vehicles are exempt, and how to cancel it.

How do I tax my car?

If your car’s already registered to you, you’ll probably receive a V11 reminder in the post when your tax is due. Then you can tax your vehicle here using the reference number.
 
If you don’t receive a reminder, you can also use the number in your V5C log book… Just follow the steps.
 
If you’ve just bought the car, then the previous owner should supply you with the new keeper slip (V5C/2). You can also use this for sorting out your taxes.
 
Good to know: It used to be the case that you could buy cars with tax remaining on them. Since the old paper tax discs were abolished, this no longer applies. When you buy a car, any tax the seller has remaining expires automatically. For this reason, you should never believe anyone if they claim the car you’re buying is “already taxed.”
 
If you don’t know whether your car’s already taxed, you can use the GOV.UK checker here. This will also let you know if the car has a valid MOT.

Are there alternative ways to tax my car?

If you don’t want to sort out your tax online – or if you’re helping someone else with their tax, and they don’t – you can also call the DVLA on 0300 123 4321. It’s a 24/7 automated service which they say takes less than four minutes, and it’s charged at a local rate.
 
You can also do it in person at certain post office branches. If you do this, you’ll need to take your V5C or V5C/2, and you may also need to show your MOT certificate.

How do I cancel my car tax?

There are a few reasons why you may need to cancel your car tax and/or arrange a refund. These include:
  •  If you sell or transfer the car,
  •  If it’s taken off the road, you get a Statutory Off Road Notification (SORN).
  •  If the car’s written off or scrapped,
  •  If it’s been exported out of the UK,
  •  If it’s registered tax exempt,
  • If it’s been stolen.
In all of these cases, you should contact the DVLA to let them know. The tax will be cancelled, and you’ll receive a refund for any full months of remaining tax. In the case of the car being stolen, you’ll have to apply for a cancellation and a refund separately.

What do I do if I sell my car?

If you sell your car, you keep the V5C log book but remove the new keeper slip and give it to the buyer.
 
The buyer needs to tax the car for themselves, but don’t assume that this means you’ll automatically be refunded. Or even that they’ll do it. Be sure to let the DVLA know that you’ve sold the car, and then you’ll get your sweet, sweet refund.

Which cars are exempt from vehicle tax?

Certain vehicles are exempt from having to pay. You still have to ‘tax’ them, in the sense that you make an annual tax declaration. It’s just that it’s free to do so.
 
These vehicles include:
  • vehicles used by a disabled person.
  •  Disabled passenger vehicles
  •  Mobility scooters and powered wheelchairs
  •  Historic vehicles (anything made before 1 January 1982)
  •  electric vehicles.
  •  Vehicles used for agriculture, horticulture, and forestry
See GOV.UK’s full list of tax-exempt vehicles to find out more, including eligibility for claiming a disability exemption.

Why do people call it a road tax or a car tax?

Vehicle tax first came about in 1888 and was payable by all motor vehicles—not just cars. In the early 20th century, it was ring-fenced as part of a road fund, which was intended to improve and maintain roads.
 
However, VED, as we know it now, was introduced in 1936, and was no longer ring-fenced – with all proceeds going to the general Treasury fund. However, the myth that it’s exclusively used to pay for roads still persists to this day, and some people still call it “road tax”.
 
One thing that pairs really nicely with road tax is insurance. By hitting the button below you can purchase Veygo’s learner driver insurance to get yourself fully prepared for when you eventually need to sort your own “road tax”.
Sean O'Neill
Sean O'Neill

Having studied English literature in university I now work within motor insurance and work closely with data teams to understand market trends in short-term car insurance and hot topics that might be helpful to car drivers out there. I'm currently learning to drive and taking driving lessons to get out on the road by myself soon!

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