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Road Fund Licence
(also known as Vehicle Excise Duty or car tax)

What is a Road Fund Licence?
In order to legally drive a car you need two licences, one for you as a driver and one for the car. 

  • To get a Driving Licence you have to pass a series of tests that show you are able to drive safely.  Once you have passed these tests you have to pay for a Driving Licence, which will last for a number of years, depending on your age.
  • Any car that is registered in the UK must also be licensed before it can be driven or parked on the roads.  This is called the Road Fund Licence but it is also referred to as car tax or Vehicle Excise Duty. The person who looks after the car (known as the “registered keeper”) has to pay for this every six months or every year. Your Road Fund Licence is a circular piece of paper that you stick on the front windscreen of your car. Most of us call them tax discs.

How much does a Road Fund Licence cost?
The cost varies. If your vehicle was registered before 1 March 2001, the cost is based on engine size whereas if it was registered after this date, its fuel type and CO2 emissions are taken into account.

You can buy a tax disc for either 6 or 12 months.

For more information see Directgov

What does the money raised from the Road Fund Licence get spent on?
There isn’t actually a specific road fund. Instead, the money raised from the Road Fund Licence gets put into a central pot along with money from other taxes. This then gets divided up amongst all the public services that the Government needs to spend money on. For more information, see our page, How taxes are spent

How do I buy a Road Fund Licence (tax disc)?
The Driver and Vehicle Licensing Agency (DVLA) is responsible for issuing tax discs. You can apply for one online, by phone or post or in person at the Post Office.

Depending on how you apply, you’ll need different bits of paperwork to hand, for example your Vehicle Registration, car insurance and MOT certificates. 

For more information see Directgov

What happens if I don’t buy one?
The DVLA does computer and roadside checks on vehicles and if you get caught without a tax disc, there are stiff penalties. This could be anything from an on-the-spot fine to having your car towed away and crushed.

Even if you’ve got a car that’s not on the road, you need to tell the DVLA. You do this by completing a form called a SORN (Statutory Off Road Notification), which is available from Directgov.


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