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Rules and regulations

Road tax explained

If you’re planning on buying a car it’s not just the cost of the car itself you need to factor in – there’s insurance, maintenance costs, fuel and of course road tax.

But what exactly is road tax, who pays it and how, and where does the money go?

Road tax is commonly misunderstood – in fact it isn’t even called road tax, it’s called vehicle exercise duty

It doesn’t, as many people think, just pay to upkeep the country’s roads.

Do I have to pay road tax?

You do, it’s a legal requirement.

The only way around it is to buy a very eco-friendly car that falls into one of the tax-free brackets. Additionally, cars made before 1973 and electric cars are also exempt.

How much does it cost?

That depends on the car you drive. If your car was made before 2001 then the road tax is calculated based on engine size, if it was made after 2001 then it’s dependent on your CO2 emissions.

To complicate matters further, some cars will pay a different amount for the first year after manufacture. It’s something you should definitely have in mind when choosing which car to buy.

Luckily most of the cars you’ll be considering as a new or learner driver will have small economical engines so will be in a low tax bracket. You may even find your tax is nothing if you go for an eco model such as the Fiesta 1.0T Ecoboost.

Car emission band Cost
Band A (up to 100 g/km) £0
Band B (101-110g/km) £20
Band C (111-120 g/km) £30
Band D (121-130 g/km) £110
Band E (131-140 g/km) £115
Band F (141-150 g/km) £145
Band G (151-165 g/km) £185
Band H (166-175 g/km) £210
Band I (176-185 g/km) £230
Band J (186-200 g/km) £270
Band K (201-225 g/km) £295
Band L (226-255 g/km) £445
Band M (over 255 g/km) £515
 

How do I buy road tax?

Online

Providing the DVLA have your up to date details and you have a valid MOT and insurance certificate, the easiest way is to buy online with a credit or debit card.

At the post office

Alternatively you can buy your road tax in person at larger post office branches. You’ll need to take the following with you:

  • Your V11 reminder (if you’ve received one)
  • Insurance certificate or cover note
  • MOT test certificate
  • Payment by cash or card

By telephone

If you prefer the phone, you can call 0300 123 4321.

Where does the money go?

As we said, most people think that road tax gets spent on roads. And until the 1930s that was indeed the case. These days it goes into a central pot and the government can spend it wherever it’s needed most. On that basis it’s impossible to know exactly where it ends up.

From October 1st 2014, you no longer need to display a paper tax disc on your vehicle windscreen.

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Jess passed her test first time at 17 and took to the busy London streets in a battered but beloved 1988 white Fiat Uno. She writes for ingenie's Young Driver's Guide and blog. You can follow Jess on .