When can you drive a car with no tax?

Are there any times when you can drive an untaxed vehicle in the UK? Generally speaking, it is a criminal offence to take a car out on the road when you have not paid the due car tax. However, there are a limited number of exceptions when you are permitted to drive an untaxed car.
An untaxed car could be impounded by the police – leading to an expensive and inconvenient procedure to release your vehicle. If this happens to you, you’ll also need impounded car insurance to help regain access to your car.

What is car tax?

Car tax is also known as Vehicle Excise Duty (VED) or road tax. The money goes into government funds and is not specifically earmarked for car-related spending. However, maintaining the nation’s system of roads, motorways, tunnels and bridges does come at a cost so it’s fair for drivers to make their contribution to public funds.
Car tax is charged at two rates: an initial higher rate in the first year after a car is registered, then a lower rate for subsequent years.

The amount you pay in the first year is determined by the carbon dioxide emissions generated by your chosen vehicle. Cars that generate no emissions are often zero-rated for tax, while the most polluting cars pay over £2,200 in their first year.
From the second year onwards, vehicles pay £155 each year for petrol and diesel cars, £0 for electric cars and £145 for alternative vehicles such as hybrids. If your vehicle has a list price of over £40,000 then a higher rate of £490 per year for petrol or diesel cars and £480 per year for alternative vehicles will apply.
 A model car placed on-top of a pile of coins

When should you pay tax on a vehicle?

If you’re buying a brand car from a dealership, car tax may be included. The dealership may be able to tax the car for you in your name if they have your insurance details.

This might be done over the phone, so that when you arrive to collect your new vehicle, everything is ready for you to drive away without a hitch.
If you’re buying a secondhand vehicle from a private seller, you still need to pay the car tax before you drive away.

The seller should give you the vehicle’s logbook, containing the V5C registration certificate that you need to register a car for tax. Use the 12-digit number on the V5C certificate to tax your vehicle online or at a branch of the Post Office before you head out onto the road.
Before 2014, a seller used to be able to transfer road tax to a new owner of a vehicle, under the previous paper tax disc system.

This is no longer the case; when a vehicle is sold, any outstanding car tax is refunded to the seller and the new buyer must pay car tax in their own name.
The paper tax discs drivers used to display in their windscreens gave a clear indication of whether a car was taxed, tipping off any passing police officer.

Since the discs were scrapped there has been a large increase in car tax evasion; in 2013, only 210,000 drivers dodged the payment but in 2019 this figure rose to 634,000 drivers. If you have trouble remembering when your tax is due, why not make yourself a calendar reminder? You should also receive a reminder in the post.

What happens if you don’t pay the tax on a vehicle?

If you drive an untaxed vehicle in the UK, the usual penalty is an £80 fine. You are usually notified by letter if this fine is payable and a 50% discount is applied if you pay up within 28 days of receiving the letter.
If you fail to pay the fine for driving an untaxed vehicle, you could be taken to court where the fine will increase to £1,000.

This is on top of all the other consequences of court action, such as legal fees, inconvenience and the possible impact of having a criminal record.

Your car could also be clamped by the Driver and Vehicle Licencing Agency (DVLA) until the fine is paid in full.
If your car is clamped by the DVLA, you should be entitled to have your car released if you pay up for any outstanding car tax within 24 hours.

If you leave it longer to pay, you will have to pay a fee of £100 to have the clamp removed. If you fail to do this as well, you may have to pay a surety fee of up to £700. 
How do the authorities know that you haven’t paid your car tax? The DVLA keeps a database of all vehicles in the UK, and each month a check is run to see which cars have not been taxed.

Unless you have taken out a Statutory Off-Road Notification (SORN) to say your vehicle is kept off-road, then a fine will be issued to the registered keeper.
Car tax must be paid for any vehicle which is kept on public roads. Unless you have a SORN confirming that the vehicle is kept off the road, for example on private land or in a garage, you are required to pay car tax. This is the case even if the vehicle never actually travels anywhere.
 A court hammer and scales

Impounding untaxed vehicles

If you go without paying your car tax for too long and ignore the lower-level repercussions such as the £80 fine, ultimately your car could be impounded by the DVLA.
If your vehicle is impounded because it is untaxed, you will have to pay a £160 surety fee to release the vehicle.

The surety fee is refunded if the outstanding tax due on the vehicle is paid within 15 days. You will also have to pay a £100 release fee, which rises to £200 if you do not claim the car within 24 hours. A daily £21 storage fee also applies.
To release your vehicle you will need to provide key documents including your photo ID, driving licence, certificate of insurance, proof of ownership, MOT certificate or evidence of a pre-booked MOT appointment and proof of the vehicle tax payment.
Impounded car insurance may be required to ensure your vehicle can be released. This is because many insurers will not provide cover for you to collect your vehicle from an impound, so you would effectively be driving the vehicle uninsured; the car will not be released to you by the impounding authority if this is the case. Read what to do if your car is clamped or impounded and what you should do to get a clamped removed.

Car insurance for an impounded car provides cover for 30 days, giving you a month to drive the car while you arrange alternative insurance.

When are you permitted to drive an untaxed vehicle?

There is a difference here between registering for tax and having to pay anything. All vehicle owners have to apply to pay Vehicle Excise Duty or car tax, but some vehicles are zero-rated and therefore no payment is required.
Exemptions to car tax (situations where you pay nothing) include: cars that are zero-rated because they have no carbon dioxide emissions and cost less than £40,000 to buy; vehicles that are viewed as ‘historic’ as they are over 40 years old; cars driven by people with disabilities who qualify for certain benefits; owners of vehicles that have a SORN because they have been taken off-road.
You are also permitted to drive an untaxed vehicle in order to get it to a garage for a pre-booked MOT test to take place.

This is because you need an MOT certificate to tax your vehicle. If you drive under these circumstances, it should be a direct trip to a garage that is not too far away – saying that you are driving to a pre-booked test 100 miles away and making multiple stops along the way would not go down well with the police if you are stopped.

Car tax and your insurance policy

Car insurance policies always include a clause requiring you to keep your vehicle taxed, along with other requirements such as getting an MOT certificate and keeping the vehicle in good repair.

If you drive your vehicle without paying the right car tax, your insurance policy could be invalidated and any claims refused.
It is important to note that insurance companies have different policies on untaxed cars. For example, if you are driving an untaxed vehicle and have a collision with another car, the other driver would probably be able to claim against your comprehensive insurance policy, but your own claim could be denied.

Individual insurers will apply different criteria to permitting claims, but the easiest way to avoid problems is to tax your car.
Driving an untaxed vehicle could lead to a criminal conviction and this is something that could impact your ability to obtain car insurance in the future.

Having a conviction is a red flag for insurers that suggests you are a reckless driver and more of a risk. Some insurers may refuse to offer you insurance, while others will quote much higher premiums to reflect your altered risk profile.
A conviction could also see your current car insurance being cancelled by your insurer. This is a serious step that you will need to disclose when applying for insurance in future. Having a policy cancelled in the recent past is often enough to make insurers refuse to offer you insurance.
 A blue Fiat parked on a long driveway in the countryside

Checking car tax on someone else’s vehicle

If you are insured to drive another car, for example a vehicle belonging to a partner or family member, you could still be in trouble if the vehicle is untaxed. You are expected to check that the vehicle complies with the law in terms of tax, MOT, insurance and roadworthiness, even if you are not the registered keeper.
If you’re not sure about when your own vehicle’s tax payment is due, or want to check if a car you are insured to drive has up-to-date tax, you can check on the government website.
It’s worth noting that anyone can use this website and then report untaxed vehicles – it doesn’t have to be a passing police officer or DVLA inspector who picks up on your tax status.

Anyone from an unfriendly neighbour to someone peeved that you’ve parked in their usual space could search to check your vehicle tax status and report you anonymously for not taxing your vehicle.

What if you do not need a full year of car tax?

A car tax payment must be made for either six months or a full year. This might be a problem if you only want to use a car for a few months or even just to transport it to a garage to see if it can be fixed.

Driving an untaxed vehicle even a short distance, unless you are going to a pre-booked MOT appointment, is against the law and could invalidate your car insurance.
If you do need to pay out for car tax despite not using the vehicle for a full year, you should be able to recover some of the money by applying to the DVLA for a refund relating to the unused portion of the car tax.

If you are taking your vehicle to a mechanic, one alternative is to see if your vehicle can be towed there. Your car does not need to be taxed if it is being towed by another vehicle.
It’s worth being aware that car tax refunds are often used by fraudsters. Beware of any emails or text messages claiming to be from the DVLA saying you are entitled to a refund on your road tax payments.

These messages will link to a bogus website asking for your personal information including bank details, which criminals use to target you.

Insurance to get you out of a tight spot

Having your car impounded can be a stressful and unpleasant experience. If your car tax has lapsed, you could find yourself in this difficult situation and without the insurance required to release your vehicle – in the meantime, costs and fees will mount up.
Impounded car insurance is there to help you get back on the road by providing 30 days’ cover for you to collect your car and arrange alternative insurance.
If you need impounded car insurance, get in touch with Insurance Factory today.
Policy benefits, features and discounts offered may very between insurance schemes or cover selected and are subject to underwriting criteria. Information contained within this article is accurate at the time of publishing but may be subject to change.