Car Tax

Car Tax:  How is it Calculated?

Car tax is something that you should know about as a car lover. Imagine yourselves paying for certain amounts that you do not even understand.   Whilst you are afraid or hesitant to ask concerned agencies about this dilemma of yours, you may always research on this topic via the net.  To help you with, you should be well-versed with the legalities and financials pertaining to car tax.

When you have heard the word car tax, what basically comes to your mind is that you want to understand what this concept is all about.  You want to know how the cost is computed.  Well, by all means, you have the right to know so.  It is your right as a consumer to be well-informed and learn about where your money is going to.  If you are a car owner in UK, there are some rules that you should know about car tax computation.

Car tax computation – Legalities

Before you ever proceed to the cost computation in car tax, you must also be equipped with some knowledge on its legalities.  A tax is created or imposed with a law that governs it.  This very same rule is applied to computation of real estate taxes, capital gains tax and documentary stamp tax.  For car tax, the law dictates the following:

1. The use of a car tax disc.  This is one of the basic rules of car tax that you should deal with properly.  A car tax disc is one that you display on your vehicles whilst you are hitting the road.  It is your responsibility as the owner to display a valid tax disc on your vehicles.  The rule here is very simple:  if you do not own a tax disc then do not drive your car.
   
   
2. There are also exemptions.  You may also avoid paying car tax if you want but make sure you underwent all legalities.  As applied to all aspects of law:  "Ignorance of the law excuses no one."  If you want to avoid car tax, you should meet any one of the following requirements.
   
   
1. You own a Band A vehicle or one that does not emit more than 100 grams of carbon dioxide for every kilometre you travel.
2. You are a disabled driver with pertinent certification like the DLA404.
3. You own an electric-powered, a hybrid or bio-fuel vehicle.
4. You are receiving the so-called War Pensioner's Mobility Supplement as supported by the document WPA442. 
5. You have declared the Statutory Off Road Notification otherwise known as SORN with the Driver and Vehicle Licensing Agency or DVLA stating that you will not utilise your car for 12 months.
   
   
3. If you are not exempted, you should apply for a car tax disc.  Learning about how to apply for a car tax disc is also very important.  Some essential items will be required.  Make sure that you have all these necessary documents with you before you go and file for your car tax disc.
   
   
4. Basically, you will need your reference number.  This one is found in the V11 reminder.  If it is not there, you may locate your reference number via your own V5 Registration certificate.
   
   
5. Vehicle registration number and valid insurance is also necessary.
   
   
6. Additionally, you should have complied with the MOT test too.
   
   
7. Last but not the least, purchasing your car tax disc will not be complete unless you have prepared the payment.

Car tax computations – financial concerns

Aside from knowing the legalities of filing for a car tax, you will surely be interested about the computations involved in the process.  Three factors are involved in the computation of the car tax and these ones will be determinants to how much you will need to pay.  Look into the following:

1. The age of your vehicle.  Depending on how old your vehicle is, the car tax will be computed.  If your vehicle was made before 1973, you are exempted from the payment of car tax 
2. Engine capacity is also regarded.  For those that are made in between the years 1973 and 2001, the computation of car tax will depend upon your vehicle's engine size.  Those who own vehicles with an engine size of up to 1549 cubic centimetres (cc) are charged at £115 per year whilst anything above that size is charged £180 per year for car tax.
3. The amount of carbon dioxide emitted by the car.  For vehicle owners whose cars were made after 2001, seven tax bands are used to gauge the payment.  Below is the basis of computation for car tax:
1. For Band A or those that have less than 100g/km CO2 emission, no cost shall be paid. 
2. For Band B or cars with 101 to 120 g/km CO2 emission, £35 should be paid yearly.
3. Band C cars or those that emit CO2 in between 121 and 150 g/km are required to pay a car tax of £120 per year.
4. Band D cars with CO2 emission amounting to 151 to 165 g/km, £145 is a required yearly payment.
5. Band E cars emitting 166 to 185 g/km of CO2 should pay £170 for each year.
6. Band F cars or those that emit more than 186 (up to 225) g/km of CO2 are charged a yearly car tax of £210.
7. Band G cars or those with C02 emission of over 226 g/km is required to pay £400 in amount of car tax for one year.

Knowing the legalities and the financial aspects of car tax will give you ample preparation and knowledge about what is in store for you.  You will also avoid being deceived by others who may overcharge you for this particular scenario.  As a responsible citizen, make sure you pay your car tax on time.