If you are the registered keeper of a vehicle in the UK, you need to pay excise duty each year, unless you keep it off the road all the time. However, it isn't a single price for everyone, and your obligation will depend on a lot of different factors. How do you check your car tax particulars so that you know how to pay and where to pay it? And crucially, what do they spend the money on anyway?
The vehicle excise duty legislation is complex and may hinge on several different parameters. Some of the factors used include:
How is Car Tax Calculated?
In the 1990s and before, government accountants would tax your vehicle according to its engine size. There is a simple split at 1549 ccs, so if you still have one of these cars on the road today, you will pay £165 for the smaller engine and £270 per year for the larger.
Since March 2001, the tax focuses on emissions in an attempt to encourage people to buy something more sustainable. There are several different bands based on CO2 emissions, and whether the vehicle is petrol, diesel or alternative (hybrid/electric).
You will pay a larger fee when you first buy a new car, and it's generally lumped into the "on the road" quote. The dealer will pay this fee directly to the government, and the price will be slightly higher for a diesel-engined car.
When it's time to renew your tax in the second year, the tax table is a bit simpler, although the cost has steadily increased over the years. If the vehicle initially cost more than £40,000, then there is a wealth tax supplement to pay as well for the first five years of ownership.
You do not have to pay vehicle excise duty if you do not keep the car on the road. However, you do have to register your intent with the government and complete a "statutory off-road notification," also known as a SORN. You'll only have to do this once but must ensure that you keep the vehicle on private land. A hefty fine will await should you drive it on a public road.
Don't forget that the government, through its dedicated agency, the DVLA, is very proactive now. If you register a car in your name and you have not filed for a SORN, then this will flag up on the central database. If you do not pay the vehicle excise duty, you will automatically get an £80 fine through the mail.
How Do You Check If a Car Is Taxed?
The government maintains a search engine that you can access here. When you enter the vehicle registration number and confirm that the details are correct, you will go to a record that will help you check car tax and MOT status. This check will show you if someone has registered a SORN as well.
Further down the page, you'll see the month and year of registration, engine capacity, CO2 emissions rating and some other information. You will also see the date that the V5C logbook was issued.
Remember, if you've just bought a vehicle, it will not automatically come with either a SORN or up-to-date tax. You will need to tax it here before you can drive it.
If you want to find out how much tax you need to pay, you can go to the Vehicle Certification Agency website. You can then check the car tax information for a new or used car based on its CO2 emissions value, and fuel type. This option is convenient if you are about to buy another vehicle but do not have the specific registration details.
Does Car Tax Pay for Roads?
If we go back in time to 1909 and the advent of the automobile, the road network across the UK was somewhat sparse. The roads that did exist were in poor repair, and the then Chancellor introduced the first vehicle excise tax to pay for building and maintenance. Records show that politicians wanted to ring-fence the vehicle excise duty into a newly established "road fund."
In the prewar period, politicians, led by Winston Churchill, decided to do away with this practice, and they diverted the money instead to the general, consolidated fund.
Fast forward to the modern era, and in the budget of 2018, the Chancellor vowed to commit all the money collected through vehicle excise duty to a specific account. To use the technical term, they would hypothecate the money, so that the Treasury could only spend it on roads infrastructure as part of the National Roads Fund.
The government's goal here is to provide "long-term certainty" in road investment, and the Treasury estimates that the government will spend almost £29 billion over the five years ending in 2025. In part, this money will pay for new major roads and larger local schemes.
They've also launched a second road investment strategy and will allocate the lion's share of excise duty revenue to this scheme. Apparently, politicians want to build on the success of a previous, similar strategy, responsible for the creation of the A1 (M) motorway in Newcastle, the trans-Pennine Expressway and the Lower Thames Crossing.
Separately, they will also spend money on a "major roads network." This network will account for key "A" roads throughout England. These will be principal arteries that will then carry a significant amount of daily traffic flow.
Individual local authorities must submit proposals to the central government to get their slice of the pie. In turn, they must build these new roads no later than 2025. Nevertheless, local authorities may need to chip into the fund and contribute as much as 15% of the budget from external sponsors or local taxes.
It may be comforting to know that your vehicle excise duty will actually pay for road construction and maintenance. However, remember that Big Brother may be watching you if you are the registered owner of a vehicle, so you should check the car tax today just in case!