Taxation is a contentious issue in any country, and the United Kingdom is no different. In this blog post, we’ll be taking a close look at car taxes in the UK. We’ll explore everything from the history of car taxation in the UK to how electric and hydrogen-powered vehicles are taxed today. So, whether you’re a resident of the UK or just someone with an interest in taxation, read on to learn everything there is to know about car taxes in the United Kingdom.
A Brief History of Car Taxation in the United Kingdom
The taxation of cars in the United Kingdom has a long and complicated history. The first car tax was introduced in 1889, when Britain’s very first motor vehicle tax was levied on every car registered in the country. This tax was based on engine size, with larger engines being taxed at a higher rate. In 1903, the annual car tax was abolished and replaced with a system of vehicle licensing which required all drivers to register their vehicles with the government and pay an annual fee.
In 1930, the government introduced a new system of car taxation called Purchase Tax. This tax was based on the purchase price of the vehicle and was payable when the vehicle was bought. The rate of Purchase Tax varied depending on the size and power of the engine, with more expensive cars being taxed at a higher rate. In 1937, Purchase Tax was replaced with an annual road tax which was payable by all drivers regardless of whether they had bought their car that year or not.
The current system of car taxation in the United Kingdom is based on Vehicle Excise Duty (VED). VED is payable annually for all cars registered in the UK and is calculated according to emissions levels. Cars which emit less than 100g/km of CO2 are exempt from VED, while those which emit more than 255g/km are subject to a surcharge on top of the standard VED rate. Electric and hybrid vehicles attract a lower rate of VED than petrol or diesel vehicles. An online car tax check will tell you exactly how much taxation there is on a single specific car. All you need is the license plate number.
As you can see, car taxes in the United Kingdom have undergone several changes over the years. However, one thing remains constant: if you want to drive a car on public roads in the UK, you need to pay your taxes! Whether you’re driving an electric vehicle or a petrol-powered one, make sure you’re up-to-date on your VED payments so that you can avoid any penalties from HMRC.