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'''Vehicle Excise Duty''' ('''VED''', also commonly but incorrectly known as '''road tax''') is an [[road tax|annual vehicle tax]] in the [[United Kingdom]] which should be paid for most types of [[motor vehicle]] which are to be used (or parked) on the [[highway|public road]]; a [[vehicle licence]] should be displayed on the vehicle. VED is an [[excise duty]] which is collected and enforced by the [[Driver and Vehicle Licensing Agency]] (DVLA). A vehicle that is not being used on the road must complete a '''Statutory Off Road Notification (SORN)'''. Excise duty on road vehicles was first introduced in the 1888 budget and a new excise duty specifically for motor vehicles was introduced in 1920 which was paid into the [[road fund]] and was [[Hypothecation|hypothecated]] for road construction. Since 1937 the money has gone into [[Taxation in the United Kingdom|central government revenues]] and since then has not contributed directly to road building or maintenance.
'''Vehicle Excise Duty''' ('''VED''', also commonly known as '''road tax''') is an [[road tax|annual vehicle tax]] in the [[United Kingdom]] which should be paid for most types of [[motor vehicle]] which are to be used (or parked) on the [[highway|public road]]; a [[vehicle licence]] should be displayed on the vehicle. VED is an [[excise duty]] which is collected and enforced by the [[Driver and Vehicle Licensing Agency]] (DVLA). A vehicle that is not being used on the road must complete a '''Statutory Off Road Notification (SORN)'''. Excise duty on road vehicles was first introduced in the 1888 budget and a new excise duty specifically for motor vehicles was introduced in 1920 which was paid into the [[road fund]] and was [[Hypothecation|hypothecated]] for road construction. Since 1937 the money has gone into [[Taxation in the United Kingdom|central government revenues]] and since then has not contributed directly to road building or maintenance.


==Current regulations==
==Current regulations==
Line 121: Line 121:


==The term 'road tax'==
==The term 'road tax'==
Since at least 1888 road and vehicle taxes have been charged as excise duties.<ref name="t_18880327"/> But although Vehicle Excise Duty has never been officially known as "road tax", it is the most widely used term for money paid to the Exchequer for driving a vehicle on UK roads. Road tax also has an entry in the [[Oxford English Dictionary]]. ''[[Which?]]'', the British consumer magazine, defended its continued use of the term in April 2010 on the basis that "road tax" was more commonly used than Vehicle Excise Duty or VED, the official technical terms.
⚫
"Road tax" is a commonly but incorrectly used in place of Vehicle Excise Duty. Road Tax does however have an entry in the [[Oxford English Dictionary]]. When the [[Road Fund]] was originally created the money from Vehicle Excise Duty was use it to fund the road network. [[Winston Churchill]] predicted that "It will be only a step from this for them to claim in a few years the moral ownership of the roads their contributions have created".<ref name="Plowden">{{Cite book|last1= Plowden|first1= William|title= The Motor Car And Politics 1896–1970|year= 1971|month= |origyear= |publisher= [[The Bodley Head]]|location= London|isbn= 0370003934|page= 201}}</ref>


Some cycling organisations have objected to the use of "road tax" on the basis that if confers on motorists more rights to the road because 'they pay road tax'. In November 2009, the 'I pay road tax' campaign launched to challenge the use of the term.{{fact}}
Some organisations, including cycling organisations, object to the use of "road tax" on the basis that they believe that it is indeed used to imply that motorists have more rights to use the road because 'they pay road tax'. A new campaign, 'I pay road tax', was launched in November 2009 to challenge the use of the term<ref>{{cite web|url=http://ipayroadtax.com/|title=iPayRoadTax|accessdate=2010-10-13}}</ref> The campaign has received support from Edmund King, President of [[The Automobile Association]].<ref>{{cite web|url=http://road.cc/content/news/15473-aa-president-applauds-ipayroadtaxcom-campaign|title=AA President applauds iPayRoadTax.com campaign|work=road.cc|accessdate=2010-10-13|quote=AA President Edmund King has given his backing to the iPayRoadTax.com initiative, applauding the website as a great example of online campaigning ... ing’s public support of the website, which seeks to dispel myths about ‘road tax,’ is testimony to the campaign’s success.}}</ref> The BBC corrected a report on [[Look East]] after receiving complaints that it suggested that the cyclist who had been knocked off their bike had less right to be on the road because the rider 'didn't pay road tax'.<ref>{{cite web|url=http://www.bikebiz.com/news/32202/BBC-backtracks-on-road-tax-report|title=BBC backtracks on 'road tax' report|work=BikeBiz|accessdate=2010-10-13|quote=Look East revisits a report on cycling which contained viewer comments about "cyclists not paying road tax ...BBC Look East ran a news story about a Cambridge cyclist being knocked from his bike by an inattentive driver but did not mention any police action being taken. Instead, BBC TV reporter Kim Riley read out viewer comments which complained that cyclists "do not pay road tax". }}</ref>


⚫
In the early 1920s the [[Road Fund]] was created by the British government to receive all revenues from VED. The direct use of taxes collected from motorists to fund the road network was opposed by [[Winston Churchill]] who said: "It will be only a step from this for them to claim in a few years the moral ownership of the roads their contributions have created".<ref name="Plowden">{{cite book |last1= Plowden|first1= William|title= The Motor Car And Politics 1896–1970|year= 1971|month= |origyear= |publisher= [[The Bodley Head]]|location= London|isbn= 0370003934|page= 201}}</ref> From 1937 the duty collected from VED was no longer [[hypothecation|hypothecated]] to the Road Fund.
''[[Which?]]'', the British consumer magazine, defended its continued use of the term in April 2010 on the basis that "road tax" was more commonly used than Vehicle Excise Duty or VED, the official technical terms.<ref>{{cite web|url=http://www.bikebiz.com/news/32087/Which-prints-road-tax-error-wont-correct-it|title=Which? prints 'road tax' error; won't correct it|work=BikeBiz|quote="The Consumers' Association, which trades as Which?, prides itself on the accuracy of its information. But the organisation which promises "you're getting the very best advice that's available" and complains about "Bamboozling Bills" has said it will continue to use 'road tax', a term that's 74 years past its sell-by date and which has sometimes led to violence against cyclists."}}</ref>

Examples of organisations using the term Road Tax:
*[[The Automobile Association]]<ref name=examples>{{cite web|url=http://ipayroadtax.com/?p=149|title=The organisations which get ‘road tax’ wrong and why this matters|work=iPayRoadTax|accessdate=2010-03-30}}</ref>
*[[BBC News]]<ref name=examples/>
*[[DirectGov]]<ref name=examples/>
*[[DVLA]]<ref name=examples/>
*[[Green Flag]]<ref name=examples/>
*[[HM Revenue and Customs]]<ref name=examples/>
*[[Police]]<ref name=examples/>
*[[RAC plc]]<ref name=examples/>
*[[What Car]]<ref name=examples/>


==See also==
==See also==

Revision as of 14:56, 16 October 2010

Vehicle Excise Duty (VED, also commonly known as road tax) is an annual vehicle tax in the United Kingdom which should be paid for most types of motor vehicle which are to be used (or parked) on the public road; a vehicle licence should be displayed on the vehicle. VED is an excise duty which is collected and enforced by the Driver and Vehicle Licensing Agency (DVLA). A vehicle that is not being used on the road must complete a Statutory Off Road Notification (SORN). Excise duty on road vehicles was first introduced in the 1888 budget and a new excise duty specifically for motor vehicles was introduced in 1920 which was paid into the road fund and was hypothecated for road construction. Since 1937 the money has gone into central government revenues and since then has not contributed directly to road building or maintenance.

Current regulations

All vehicle used or kept on the public road must have a valid tax disk and are required to display the issued non-transferable vehicle licence ("tax disc") on the vehicle. Owners of registered vehicles who do not wish to use or store a vehicle on the highway are required to submit an annual Statutory Off-Road Notification (SORN).[1] Failure to submit a SORN is punishable in the same manner as failure to pay duty and display a tax disc when using the vehicle on public roads.

The police have also been granted devolved powers to tow or clamp any vehicles a police officer or PCSO sees, that is unlicensed on a public road.

If you have paid for vehicle tax by phone or online before the current disc runs out, then you can legally drive or keep your vehicle on the road whilst displaying the tax disc that has run out, for up to 5 working days (giving time for your new tax disc to arrive by first class post).[citation needed]

The owner of a vehicle that is not being used on the road must complete a 'Statutory Off Road Notification (SORN)'.[2]

Charges

  • Cars registered before 1 March 2001 are charged according to engine capacity. In the 2008–2009 tax year this was £120 for cars with a capacity not over 1549cc and £185 for those over 1549cc. This was increased from 1 May 2009 to £125 for those cars not over 1549cc and £190 for those cars over 1549cc.
  • Cars registered on or after 1 March 2001 are charged according to their level of carbon dioxide (CO2) emission. For 2008–2009 this was up to £400, with the least emitting vehicles paying no excise duty at all. From 1 May 2009 petrol and diesel cars could pay up to £405.
  • The highest rates of Vehicle Excise Duty ("Band G") only apply to vehicles manufactured after 23 March 2006 - the maximum VED for vehicles manufactured before that date is £205 for petrol and diesel powered vehicles. This increased to £215 from 1 May 2009.

Rates for all other vehicles vary from £15 for motorcycles with an engine capacity not over 150cc, up to a maximum of £1,850 for the largest heavy goods vehicles (HGVs). (Special rates apply to HGVs not used commercially.) A few special-purpose vehicles such as ambulances are exempt.

Exempt vehicles

Various classes and uses of vehicle are provided with a tax disk without charge.

Vehicles constructed before 1 January 1973 are eligible for a free vehicle licence under "classic car" legislation. This is due to the age of the vehicle and a presumption of limited mileage. Initially this was a rolling exemption applied to any vehicles over 25 years old, however the cutoff date was frozen in 1997. The change to "pre-1973" was unpopular in the classic motoring press, and a number of classic car clubs are campaigning for a change back to the previous system.[3] In 2006 there were 307,407 vehicles in this category:[4]

Other exempt vehicle (broadly in descending order of total number) include:

  • Vehicles registered to disabled people (1.12 million vehicles).[5]
  • Emergency vehicles (includes police cars, fire-engines, and ambulances and other health-service vehicles). (450,000 vehicles)[citation needed]
  • Vehicle registered to ex-soldiers who are in receipt of war pensioners’ mobility supplement (18,340 vehicles).[6]
  • Band A cars (306 vehicles in 2006, but rising fast).[citation needed]
  • Ministerial cars.[7]
  • Vehicles operated by the Government Car and Despatch Agency.[citation needed]
  • Cars imported by American soldiers stationed in Britain.[citation needed]
  • Road construction vehicles.[8]
  • Vehicles owned by the crown for the use of Queen Elizabeth II and other members of the royal family.[citation needed]

Enforcement

See also: Traffic enforcement camera

Automatic number plate recognition (ANPR) systems are being used to identify untaxed, uninsured vehicles and stolen cars.[9][10]

History

Following the 1888 budget, two new vehicle duties were introduced — the locomotive duty and the trade cart duty (a general wheel-tax also announced in the same budget was abandoned). The locomotive duty was levied at £5 (£Error when using {{Inflation}}: |end_year=2,024 (parameter 4) is greater than the latest available year (2,023) in index "UK". as of 2024),[11]for each locomotive used on the public roads and the trade cart duty was introduced for all trade vehicles (including those which were mechanically powered) not subject to the existing carriage duty, with the exception of those used in agriculture and those weighing less than 10 cwt-imperial, at the rate of 5s. (£0.25) per wheel.[12][13]

In the budget of 1909, the then Chancellor of the Exchequer, David Lloyd George announced that the roads system would be self financing,[14] and so from 1910 the proceeds of road vehicle excise duties were dedicated to fund the building and maintenance of the road system.[15]

The Roads Act 1920 required councils to 'register all new vehicles and to allocate a separate number to each vehicle' and 'make provision for the collection and application of the excise duties on mechanically-propelled vehicles and on carriages'. The Finance Act 1920 introduced a 'Duty on licences for mechanically propelled vehicles' which was to be hypothecated and paid into a newly established Road Fund.[16] Excise duties specifically for mechanically propelled vehicles were first imposed in 1921, along with the requirement to display a vehicle licence (tax disc) on the vehicle.[15]

The accumulated Road Fund was never fully spent on roads (most of it was spent on resurfacing, not the building of new roads), and became notorious for being used for other government purposes, a practice introduced by Winston Churchill, when Chancellor of the Exchequer.[citation needed] Hypothecation came to an end in 1937 under the 1936 Finance Act, and the proceeds of the taxes were paid directly into the Exchequer. The Road Fund itself, funded by government grants wasn't abolished until 1955.[14]

Since 1998, owners of registered vehicles not using the public roads have been required to submit an annual Statutory Off-Road Notification (SORN).[17] Failure to submit a SORN is punishable in the same manner as failure to pay duty and display a tax disc when using the vehicle on public roads.

In June 1999, cheaper car tax was introduced for cars with an engine capacity up to 1100cc.[18] The cost of 12 months tax for cars up to 1100cc was £100, and for those above 1100cc was £155.

In the pre-budget report of 27 November 2001 the Government announced that VED for HGVs could be replaced, by a new tax based on distance travelled, the Lorry Road-User Charge (LRUC).[19] At the same time, the rate of fuel duty would be cut for such vehicles. As at the start of 2007 this scheme is still at a proposal stage and no indicated start date has been given.

The primary aim of the change is that HGVs from the UK and the continent pay exactly the same to use British roads (removing the ability of foreign vehicles to pay no UK tax). However, it is also expected that the tax will be used to influence routes taken (charging lower rates to use motorways), reduce congestion (by varying the charge with time of day), and encourage low emission vehicles.

In tax year 2002–2003, it is estimated that evasion of the tax equated to a loss to the Exchequer of £206 million. In an attempt to reduce this, from 2004 an automatic £80 penalty (halved if paid within 28 days) is issued by the DVLA computer for failure to pay the tax within one month of the expiry of the previous tax disc. A maximum fine of £1,000 applies for failure to pay the tax, though in practice fines are normally much lower.

In March 2005, graduated vehicle excise duty (GRAD VED) was introduced as an incentive to purchase vehicles with low emission levels.

In June 2005 the government announced plans to adopt a similar road user charging scheme for other road vehicles, which would work by tracing the movement of all vehicles using a telematics system. The idea raised immediate objections on civil and human rights grounds that it would amount to mass surveillance. An online petition protesting this was started and reached over 1.8 million signatures by the closing date of 20 February 2007.

Since 1 September 2008, the DVLA have stated: "If you pay your vehicle tax by phone or online before the current disc runs out, then you can legally drive or keep your vehicle on the road whilst displaying the tax disc that has run out, for up to 5 working days (Giving time for your new tax disc to arrive by first class post)."

From April 2009 there will be a reclassification to the CO2 bandings with the highest paying £455 per year and the lowest £0, the bandings have also been backdated to cover vehicles registered on or after 1 March 2001, meaning that vehicles with the highest emissions registered after this date pay the most. Pre 1 March 2001 vehicles will still continued to be charged according to engine size, above or below 1549cc.

In 2009 a consultation document from the Scottish Government raised the possibility of a road tax on all road users including cyclists, but there was a strong consensus against this.[20][21]

From 2010 a new first year rate is to be introduced - dubbed a showroom tax. This new tax was announced in the 2008 budget, and the level of tax payable will be based on the vehicle excise duty band, ranging from £0 for vehicles in the lower bands, up to £950 for vehicles in the highest band.[22][23]

Historical charges

Charges in £

2005-06[24] 2006-07[25] 2007-08[26] 2008-09[27] 2009-10[28] 2010-11[28]
Petrol Diesel
Engine size of vehicles registered before 1 March 2001
<=1549cc 110 110 110 115 120 125 125
>1549cc 170 175 175 180 185 190 205
CO2 emissions of vehicles registered on or after 1 March 2001
Band A (up to 100g/km) 65 0 0 0 0 0 0
Band B (101-110g/km) 75 40 50 35 35 35 20
Band C (111-120g/km) 75 40 50 35 35 35 30
Band D (121-130g/km) 105 100 110 115 120 120 90
Band E (131-140g/km) 105 100 110 115 120 120 110
Band F (141- 150g/km) 100 100 110 115 120 125 125
Band G (151 to 165g/km) 125 125 135 140 145 150 155
Band H (166 to 175g/km) 150 150 160 165 170 175 180
Band I (176 to 185g/km) 150 150 160 165 170 175 200
Band J (186 to 200g/km) 165 190 195 205 210 215 235
Band K (201 to 225g/km) 165 190 195 205 210 215 245
Band L (226 to 255g/km) 165 210 215 300 400 405 425
Band M (Over 255g/km) 165 210 215 300 400 405 435

The term 'road tax'

Since at least 1888 road and vehicle taxes have been charged as excise duties.[12] But although Vehicle Excise Duty has never been officially known as "road tax", it is the most widely used term for money paid to the Exchequer for driving a vehicle on UK roads. Road tax also has an entry in the Oxford English Dictionary. Which?, the British consumer magazine, defended its continued use of the term in April 2010 on the basis that "road tax" was more commonly used than Vehicle Excise Duty or VED, the official technical terms.

Some cycling organisations have objected to the use of "road tax" on the basis that if confers on motorists more rights to the road because 'they pay road tax'. In November 2009, the 'I pay road tax' campaign launched to challenge the use of the term.[citation needed]

In the early 1920s the Road Fund was created by the British government to receive all revenues from VED. The direct use of taxes collected from motorists to fund the road network was opposed by Winston Churchill who said: "It will be only a step from this for them to claim in a few years the moral ownership of the roads their contributions have created".[29] From 1937 the duty collected from VED was no longer hypothecated to the Road Fund.

See also

References

  1. ^ How to make a SORN (Statutory Off Road Notification) : Directgov - Motoring
  2. ^ "How to make a SORN (Statutory Off Road Notification)". DirectGov. Retrieved 13 October 2010.
  3. ^ "Classic Car VED Exemption". Your Government. Retrieved 6 September 2010.
  4. ^ "Motor Vehicles: Excise Duties". TheyWorkForYou. Retrieved 30 March 2010.
  5. ^ "Motor Vehicles: Excise Duties". theyworkforyou. Retrieved 30 March 2010.
  6. ^ "War Pensioner's Mobility Supplement". Hansard. Retrieved 30 March 2010.
  7. ^ "Official Cars: Taxation". Hansard. Retrieved 30 March 2010.
  8. ^ "Exempt vehicles". OPSI. Retrieved 31 March 2010.
  9. ^ John Lettice (15 September 2005). "Gatso 2: rollout of UK's '24x7 vehicle movement database' begins". The Register. Retrieved 14 October 2008.
  10. ^ Chris Williams (15 September 2008). "Vehicle spy-cam data to be held for five years". The Register. Retrieved 15 October 2008.
  11. ^ UK Retail Price Index inflation figures are based on data from Clark, Gregory (2017). "The Annual RPI and Average Earnings for Britain, 1209 to Present (New Series)". MeasuringWorth. Retrieved 7 May 2024.
  12. ^ a b "The speech of the Chancellor of the Exchequer". The Times. 27 March 1888.
  13. ^ "The Excise Duties (Local". The Times. 27 March 1888.
  14. ^ a b "Louise Butcher" (25 November 2008). "Vehicle excise duty (VED)". "House of Commons Library". {{cite journal}}: Cite journal requires |journal= (help)
  15. ^ a b "House of Commons Environmental Audit Committee" (22 July 2008). "Vehicle Excise Duty as an environmental tax". "The Stationery Office Limited". {{cite journal}}: Cite journal requires |journal= (help)
  16. ^ C.D. Buchanan (1958). Mixed Blessing: The Motor in Britain. Leonard Hill.
  17. ^ How to make a SORN (Statutory Off Road Notification) : Directgov - Motoring
  18. ^ : Budget Report 1999
  19. ^ "The Pre-Budget Report: Building a stronger, fairer Britain in an uncertain world" (Press release). UK HM Treasury. 27 November 2001.
  20. ^ Dynesh Vijayaraghavan (2009). "Cycling Action Plan for Scotland: Analysis of Consultation Responses" (PDF). Sustainable Transport Team, Scottish Government. p. 3.
  21. ^ "A road tax for cyclists On your bike". The Scotsman. 12 January 2010.
  22. ^ Robert Winnett (13 March 2008). "Budget 2008: Motorists suffer tax hits in 'green' budget". The Daily Telegraph. Telegraph Media Group. Retrieved 14 May 2008.
  23. ^ "Budget 2008 - motoring taxes". DirectGov. Retrieved 14 May 2008.
  24. ^ http://www.bytestart.co.uk/content/taxlegal/9_15/vehicle-excise-duty-rates-2006-7.shtml (calculated from 2006-07 charges and changes)
  25. ^ http://www.bytestart.co.uk/content/taxlegal/9_15/vehicle-excise-duty-rates-2006-7.shtml
  26. ^ http://www.bytestart.co.uk/content/taxlegal/9_15/vehicle-excise-duty-rates-2007-8.shtml
  27. ^ http://www.bytestart.co.uk/content/taxlegal/9_15/vehicle-excise-duty-rates-2008-9.shtml
  28. ^ a b http://www.bytestart.co.uk/content/taxlegal/9_15/ved-rates-2009-2011.shtml
  29. ^ Plowden, William (1971). The Motor Car And Politics 1896–1970. London: The Bodley Head. p. 201. ISBN 0370003934. {{cite book}}: Cite has empty unknown parameter: |month= (help)

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