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Car Tax Rules and Regulations

By: Sally Aquire - Updated: 9 Jun 2016 | comments*Discuss
Car Tax Rules And Regulations

If you own a registered vehicle, you are legally obliged to pay car tax. Failure to do this will result in a financial penalty or possible prosecution. This article offers advice on paying car tax on both your own car and a company car, as well as briefly discussing the government's new car tax rules (which will come into play from 2010).

Getting your car tax

You can pay your car tax online, over the phone or at certain Post Office branches. Whichever method you choose, you will need one or more of the following:
  • Your V11 reminder (this is sent around three weeks before your car tax is due to be renewed)
  • Your V10 Vehicle License application form
  • Your Vehicle Registration Certificate (if using a V10 form)
  • Your V62 application for a Vehicle Registration Certificate V5C (if you don't have a Vehicle Registration Certificate)
  • A valid MOT (for cars aged three years and over)
  • At least third party insurance
  • Payment

Tax Discs No Longer Needed

You no longer need to display a valid tax disc on your car windscreen. All vehicle tax collections are recorded electronically; the police/DVLA use the DVLA electronic vehicle register and automatic number plate recognition (ANPR) systems to identify whether a vehicle has up to date tax.

Renewing your car tax

You can renew your vehicle tax from the 15th day of the month on which it becomes due. To pay your car tax disc in the first instance, you can do this from the first of the month.

Failing to pay your car tax

If you do not pay your car tax on time, you will be fined. This is £80, but this will be reduced to £40 if you pay the fine within 28 days. Persistent offenders can be fined £1000 and prosecuted. It is now even easier for the DVLA (Drivers and Vehicle Licensing Agency) to track down tax dodgers, as it will show up on their computer system if a registered vehicle has not had its tax paid or renewed.

Changing your details

If you sell or scrap your car, it is your responsibility to inform the DVLA that you are no longer the registered owner of the car. If you fail to do this, you will still be liable for tax on the vehicle, even if you are no longer driving it. Likewise, you need to tell the DVLA if your name or address changes, so that your V11 reminder form can be sent to you on time.

Paying tax on company cars

If you are given a company car for your work, you still need to pay tax on it. The amount of tax is dependent on the list price of the car (and its accessories), its C02 emissions, and the type of fuel that it uses. Other factors can include any capital contributions (a lump sum to use the car), any regular payments towards the private use of the car, and whether it is available throughout the full tax year. The typical tax cost is between 15 and 35 per cent of the list price, minus reductions if you use alternative types of fuel.

If you only use the car to commute to and from work, you do not have to pay tax on it. However, you need to be able to prove to HMRC that you do not use the car for private use. You can do this using documents proving mileage use, or have it written into a signed agreement or employment contract. These will need to be shown to HMRC by you or your employer.

The new car tax rules

If a vehicle changes hands/is sold, the vehicle tax cannot pass on to the new owner. Once the DVLA is informed of the sale, any outstanding tax is refunded to the previous owner. As the new owner it's your responsibility to pay the tax and to make sure the DVLA has your owner details.

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Invogue - Your Question:
UPDATE: Since October 2014 you NO LONGER NEED to display car tax disc in your car. And car tax is no longer transferable to the new owner of the vehicle.

Our Response:
Thanks we've updated this article at last!
SaferMotoring - 9-Jun-16 @ 12:20 PM
UPDATE: Since October 2014 you NO LONGER NEED to display car tax disc in your car. And car tax is no longer transferable to the new owner of the vehicle.
Invogue - 8-Jun-16 @ 11:08 AM
In your article, you say: "If you own a registered vehicle, you are legally obliged to pay car tax," That isn't true. If the vehicle is not being used or kept on public roads, a SORN (stautory off road notification) can be made, and no tax is due untiol the vehicle is returned to service.
Max - 10-Feb-13 @ 7:18 PM
If I am not the registerd keeper of a car can I still tax and Insure it in my own right?
Nick - 18-Nov-12 @ 3:49 PM
You are not legally obliged to get car tax if your vehicle is SORNed (Stautory Off Road Notification).
Doylee - 19-Jul-12 @ 11:31 AM
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