“Oh I just love paying taxes”
Nobody, ever.
What is Road Tax?
Road Tax, otherwise known as VED (Vehicle Excise Duty) is an annual tax payable by anyone who has a roadworthy vehicle and wants to drive it on UK roads. Simply put if you have a car and want to drive it legally you need to pay your Road Tax.
Why does Road Tax exist?
Simply put, road tax exists in order to raise funds to help with the maintenance and development of the UK’s roads. But it is not just the roads that the tax pays for, it is also used as a tool to reduce carbon emissions and fund things such as government road safety initiatives.
So why is there still so many potholes?
Unfortunately the taxes raised by Road Tax are not exclusively used for the upkeep of the roads. Whilst the DVLA is responsible for ensuring every vehicle owner in the UK pay their share, they do not allocate the budget.
Instead all funds raised by Road Tax is given to the general funds of the treasury. The government will then set the national budget and allocate the money to the local councils and the Department for Transport. The Department for Transport is responsible for major roads and motorways, along with road safety campaigns. The local council must decide how much money to allocate for upkeep of the roads in their district.
So why is there still so many potholes? When the councils receive their budget, they have to consider everything from schools to hospitals to police. As a result they do not always have the resources available to keep every road perfectly maintained.
What does Road Tax pay for then?
So the money raised by road taxes is allocated to local councils and the Department for Transport. What exactly do they spend the money on though?
The Department for Transport is generally responsible for the nations road network, and they maintain and build the motorways or run national safety initiatives. The council meanwhile will work at a more local level and they are responsible for the other roads that lie within their borders.
The list below breaks it down in more detail, please note that this does not cover everything.
Local Council:
- Local road maintenance and repair
- Street lighting and signage
- Traffic management and enforcement
- Public transportation services
- Car parks
- Cycle lanes and pedestrian infrastructure
- Local transportation planning and improvements
Department for Transport
- Major road infrastructure projects
- Highways England’s operations and maintenance
- National road network upgrades
- Road safety initiatives and campaigns
- Funding for public transport networks
- Strategic transportation planning and policies
Does everybody have to pay Road Tax?
Not everyone pays Road Tax, it is possible to be exempt from the tax. You don’t have to pay Road tax if you fall under any of the following categories.
Vehicles used by a disabled person
If you receive any of the following benefits you are exempt:
- higher rate mobility component of Disability Living Allowance (DLA)
- enhanced rate mobility component of Personal Independence Payment (PIP)
- enhanced rate mobility component of Adult Disability Payment (ADP)
- higher rate mobility component of Child Disability Payment
- War Pensioners’ Mobility Supplement
- Armed Forces Independence Payment
Historic Vehicles
If your vehicle was made before the 1st of January 1983 then you are exempt from paying vehicle tax. You can check if your vehicle is eligible here.
Mobility Vehicles
If you drive a mobility vehicle or a powered wheelchair but you are exempt if you meet the following criteria:
- It has a maximum speed of 8mph on the road.
- It is fitted with a device that will limit it to a maximum of 4mph when on the a footway.
Electric Vehicles
In order to be eligible as exempt the electricity used to charge your car must come from the following:
- Hydrogen fuel cells
- An electric battery that is not connected to any source of power whilst the vehicle is in motion
- An external source, such as a private or public charge point.
Agricultural Vehicles
- Tractors
- Agricultural engines
- Light agricultural vehicles used off-road
- ‘Limited use’ vehicles for short journeys (up to 1.5km) on public roads between one’s own lands.
