Vehicle Excise Duty

Vehicle Excise Duty (VED; also known as "vehicle tax", "car tax", and "road tax", and formerly as a "tax disc") is an annual tax levied as an excise duty, and which must be paid for most types of powered vehicles which are to be used or parked on public roads in the United Kingdom.[1] Registered vehicles that are not being used or parked on public roads and which have been taxed since 31 January 1998 must be covered by a Statutory Off Road Notification (SORN) to avoid VED. In 2016, VED generated approximately £6 billion for the Exchequer.[2][3]

A vehicle tax was first introduced in Britain in 1888. In 1920, an excise duty was introduced that specifically applied to motor vehicles; initially it was hypothecated (ring-fenced or earmarked) for road construction and paid directly into a special Road Fund. After 1937, this reservation of vehicle revenue for roads was ended, and instead the revenue was paid into the Consolidated Fund – the general pot of money held by government. Since then, maintenance of the UK road network has been funded out of general taxation, of which VED is a part.[4]

  1. ^ "The road user and the law". Direct.gov.uk. Most of the provisions apply on all roads throughout Great Britain, although there are some exceptions.
  2. ^ "FAQs about motoring taxation and cost of running a car". www.racfoundation.org. Archived from the original on 28 March 2018. Retrieved 28 March 2018.
  3. ^ "Transport Statistics Great Britain 2017" (PDF). Department for Transport. November 2017. p. 25. Retrieved 28 March 2018.
  4. ^ Butcher, Louise (23 November 2017). "Parliamentary Briefing Paper: Vehicle Excise Duty (VED)" (PDF). House of Commons Library. Retrieved 13 February 2013.