Vehicle Excise Duty

Vehicle Excise Duty (VED) (also known as 'vehicle tax', 'car tax', and 'road tax') is a tax that is levied as an excise duty and which must be paid for most types of vehicles which are to be used (or parked) on the public roads in the United Kingdom. A Statutory Off Road Notification (SORN) must be made for a registered vehicle that is not being used on the road, and which has been taxed since 31 January 1998. VED, which is collected and enforced by the Driver and Vehicle Licensing Agency (DVLA), raised GB£5.63 billion in 2009. Until 2014, when responsibility was transferred to the DVLA, VED in Northern Ireland was collected by the Driver and Vehicle Agency there.

Vehicle tax was introduced in the 1888 budget and the current system of excise duty applying specifically to motor vehicles was introduced in 1920. This excise duty was ring-fenced (earmarked) for road construction and was paid directly into a special Road Fund from 1920 until 1937 after which it was treated as general taxation. Even during this period the majority of the cost of road building and improvement came from general and local taxation owing to the tax being too low for the upkeep of the roads.

The licence is issued upon payment of the appropriate VED amount (which may be zero). Owners of registered vehicles which have been licensed since 31 January 1998 and who do not now wish to use or store a vehicle on the highway are not required to pay VED, but are required to submit an annual Statutory Off-Road Notification (SORN). Failure to submit a SORN is punishable in the same manner as failure to pay duty when using the vehicle on public roads.

Until 1 October 2014 a vehicle licence (tax disc) had to be displayed on a vehicle as evidence of having paid the duty. Since that date, there is no longer a requirement to display a disc as the records are now stored in a centralised database and accessible using the vehicle registration plate details.

There are currently two payment schedules in effect, depending whether the car was first registered before or after April 1 2017.

...
Wikipedia