Road Tax UK Explained: What Is Road Tax Used For?

road tax

Car owners will be all too familiar with the extra costs that come with operating a personal vehicle. Unfortunately, buying a car can often be the tip of the iceberg. It is a purchase followed by a host of other costs like road tax, that can really add up. 

For those who are new to the roads, these additional fees can be an irritating caveat to the freedom that having a car provides. Why should I have to pay road tax when I’ve already paid for the car itself? The truth is, road tax forms a necessary part of making the country safe for everyone to drive in. 

In this article, we are going to shed some light on road tax and what your hard-earned money goes towards. Let’s get started. 

What Is Road Tax & What Is Road Tax Used For?

road tax

Road tax is annual government taxation payable by anyone with a roadworthy vehicle.

It has a long history in the UK, which is central to understanding both why it is used, and how it directly affects you.

Despite commonly being referred to as road tax, the extra payment you make for the pleasure of using this country’s roads is actually known officially as vehicle tax, or vehicle excess duty (VED).

Vehicle tax is collected by the central government in Whitehall before being distributed to local councils. The councils then choose which projects they fund, which could be anything from resurfacing the roads and filling potholes. To more ambitious projects like car parks and changes to major junctions. 

In other words, your road tax is used for the upkeep of the nationwide system. It is still extremely important, and paying your road tax will help ensure that the roads are maintained and periodically upgraded. 

The repercussions for failing to pay road tax can also be quite severe. If you fail to pay your tax, the DVLA may charge you £80.

Slightly ominously, the government website advises that if you fail to pay this penalty fee, your vehicle could even be clamped or crushed, or your details passed on to a debt collector.  Plenty of reason to pay up, then!

How To Pay Road Tax

road tax

Thankfully, paying road tax is a relatively simple task.

First of all, you might want to check if your vehicle has already had tax paid on it. You can find out if a car is road taxed on the gov.uk website.

Simply enter your registration number, and the online portal should tell you if there is anything that you need to pay. 

However, different cars will be required to pay different amounts.

One of the benefits of owning an electric vehicle is that you do not have to pay road tax. Electric vehicles are exempt from payments, as are vehicles used by a disabled person and vehicles used for agriculture. 

Manufacturers are producing more electric vehicles at lower costs. Meaning that the range of cars with no road tax obligations is only getting bigger. 

Do You Pay Road Tax On Hybrid Cars? 

hybrid cars

This will depend on the emissions that your car gives off. As well as several other potential factors like the age of the vehicle. 

Again, it’s probably easiest if you are unsure to check by using the government website. Road tax nowadays is calculated (in large part) by the total emissions of your car. So, owning a hybrid means that there is a greater chance of paying very little, or in some cases nothing at all. 

All of this can be done online – unless you are notified that you need to register for vehicle tax, or any of your vehicle details have changed. If this has happened, you may need to prepare a road tax application form. 

This is essentially just the written version of what you would be provided on the government website. Except you will need to send the copy off to the DVLA for them to enter into their system. It is quite rare to be required to send one of these paper forms. So, it’s easiest not to do so unless you are specifically required to.

Can I Cancel My Road Tax Online?

car money

If you decide to stop driving just after you’ve paid your road tax, you can claim it back for any months that you did not use it for. 

You’ll have to inform the DVLA that you aren’t operating your vehicle anymore in order to be eligible for this refund.

As soon as your change has been registered, you can expect a cheque to come in the post relatively promptly to the amount that you are owed. The DVLA estimates that you will get your refund in 4-8 weeks, depending on how you contacted them initially.

The full list of reasons that make a person eligible to claim a refund on their road tax is quite extensive.

These include your car being written off, being in storage or taken off the road, or, if you have had it upgraded to change its emission ratings.

If you are at all unsure if you are able to claim any money back from your road tax, get in touch with the DVLA. You might find that you are entitled to a surprising amount of money.

Road Tax – Necessary Yet Avoidable

road tax

Road tax pays for the upkeep of the roads and other vital services. It has been used for decades in the UK as a way to make sure that only road users pay to keep the roads operational.

As part of their attempts to encourage the use of electric, hybrid, and lesser polluting vehicles, the government has made road tax roughly equivalent to the number of emissions your car gives off. This means that by using websites like FairSquare, it is now possible to reduce the amount you pay on your road tax by switching to a cleaner vehicle.

This is good news for the environment and also your finances.

Road tax can be an annoying extra payment for motorists. However, depending on the car you drive and your current situation, you may be entitled to reclaim your road tax. Or, even switch so that you owe nothing at all.

Use FairSquare To Save On Your Road Tax

fairsquare logo

Less polluting cars – in particular hybrids and electric vehicles, are seeing a surge in popularity as drivers look to help the environment, but also to cut down on the taxes and surcharges that they face from driving traditional cars. 

The choice is an important one and if you’re feeling overwhelmed, don’t worry. FairSquare offers a wide selection of different vehicles that could help you to pay less on your road tax.

Our handy online search engine can be filtered to return results for cars with specific engine types so that you can be sure your next car will be green and cut down your costs. 

Road tax might seem like an insignificant cost. But over months and years, it means that you could be left paying way over the odds for something that is easily avoided.

FairSquare provides the option of finding the right vehicle in light of these extra fees. The FairSquare website can not only find you your next car, but it can also save you a lot of money in the long run. Browse our cars for sale today. 

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