Road Tax

Road tax is one of the costs that need to be taken into consideration when choosing a car. If you are the registered keeper of a motor vehicle, you are legally required to obtain a tax disc if the car is used or kept on a public road.

Otherwise, you must make a Statutory Off Road Notification (SORN) to the Driver and Vehicle Licensing Agency (DVLA) stating that the car is not in use, in which case it must not be kept on a public road. A SORN will exempt you from paying vehicle tax for just 12 months and you must keep applying for an extension every year until you decide to pay the levy or change ownership of the car.

The type of vehicle you drive will usually determine the amount of tax you have to pay to keep it on the road, with smaller-engine, environmentally friendly cars generally enjoying lower rates or no taxation for certain periods.

However, it is worth noting that the rates are also determined by what side of 1st March 2001 a car falls, fuel type and principle use. Vehicles registered before this date pay their road tax according to their engine size, but those produced after this period are levied according to their CO2 emissions.

The duty is divided into tax bands running from A to M, with the former being the most eco-friendly and the latter the least. Those in band A, which is comprised of cars emitting up to 100g/km are exempt from paying any tax at all in 2010/11. By comparison, cars in band M, made up of those emitting more than 255g/km, pay £1,000 in their first year.

Exemptions

There are certain vehicles that are exempt from paying vehicle tax, although they still need to display a valid 'free' tax disc renewed each year. They include cars that belong to disabled persons who may not need to pay the levy if they get certain benefits.

Others are mobility scooters, powered wheelchairs and invalid carriages. Old or vintage vehicles produced before 1 January 1973 are taxed under the 'historic vehicle' tax class, while electric and steam vehicles are levied under the 'electric vehicle' and 'steam propelled' tax class respectively.

Mowing machines are taxed under the 'mowing machine' tax class, while agricultural, horticultural and forestry vehicles are exempt from vehicle tax.