What Happens If Car Tax Is Overdue?

If you are wondering about what happens when car tax is overdue, you will find the answer to your question in this blog post as it provides a comprehensive overview of the consequences of overdue car tax and offers valuable information for those seeking to navigate the complexities of vehicle taxation in the UK. In the end, you will find advice on how to manage your car tax debt and avoid it in the future.

What Happens If Car Tax Is Overdue?

There are varied consequences if your car tax is overdue. The DVLA can take a number of actions depending on how long your car tax has been overdue, the amount in question and whether you’ve made any attempts to pay the due amount or not.

Car tax or Vehicle Excise Duty, is an annual tax that must be paid by all UK vehicle owners and failing to pay this tax can result in severe consequences. This includes the following 

  • fines and penalties 
  • legal action
  • vehicle impounding
  • third party debt collection

As a first step, a late licensing penalty (LLP) letter is issued by the DVLA when there is car tax overdue. The initial fine is set at £80; which can be reduced to £40 if it is paid within 33 days of the LLP being issued. However, if the fine is not paid, the penalty can increase to £1,000 and the case will be referred to a debt collection agency. 

Secondly,  if you usually pay car tax by Direct Debit and fail to make the payment leading to car tax debt, the DVLA may stop you from using this payment method in the future.

Additionally, the DVLA has the authority to clamp or impound a vehicle with overdue car tax. Clamping involves immobilising the vehicle, making it impossible to drive until the tax is paid. Furthermore, the cost of removing the clamp and releasing the vehicle can add significant expenses to the already overdue payment. 

If you fail to recover your vehicle from a vehicle pound the DVLA has the authority to dispose of it by choosing to dismantle, auction or scrap the car.

To make matters worse, if you continue to avoid payment and ignore communication from the DVLA, legal action may be taken against you. This can result in court proceedings and further financial penalties, including potential court costs if the case goes to trial.

Finally, failing to pay your car tax on time is considered an offence under the law. The DVLA has the authority to take various actions to enforce payment and ensure compliance. This may involve sending debt collectors to your home for payment of overdue car tax.

What Are The Financial Implications Of Overdue Car Tax?

Failing to pay your car tax on time in the UK can lead to a range of financial implications, including fines and penalties. 

For instance, if the overdue car tax remains unpaid, the DVLA can enforce financial penalties. The amount of the fine can vary depending on the length of time the tax has been overdue and the vehicle’s emissions level. 

In the case of impoundment, the vehicle is seized and taken to a secure compound. Reclaiming an impounded vehicle involves additional costs for towing, storage fees, and potential administration charges.

This includes the following:

  • a £100 clamp release fee which must be paid within the first 24 hours of wheelclamping; 
  • a £200 impound release fee which becomes applicable when the vehicle is removed to a vehicle pound;
  • a £21 per day storage fee that starts once the vehicle has been moved to the vehicle pound

To prevent the financial implications of overdue car tax, it is vital to stay organised and ensure your tax is paid on time. If you are unable to pay in full, consider setting up a direct debit to spread the cost over monthly instalments. 

What Are The Legal Implications Of Overdue Car Tax?

When it comes to overdue car tax, there are not only financial implications but also legal consequences that vehicle owners need to be aware of. 

Here are some potential legal implications and consequences for not paying your car tax on time:

  • If you continue to evade payment and ignore communication from the DVLA, they may take legal action against you. This can lead to prosecution and potential court proceedings. If the case goes to trial and you are found guilty, you may face further financial penalties, including court costs.
  • In addition to financial penalties, the DVLA has the power to issue penalty points on your driving license if you fail to pay your car tax on time. Accumulating penalty points can have serious implications for your driving privileges, potentially leading to license suspension or revocation.
  • Failing to pay your car tax on time can also lead to potential issues with your insurance coverage. If your tax is overdue and you are involved in an accident, your insurance company may deem your policy invalid, leaving you personally responsible for any damages or injuries.
  • If you have overdue car tax, it can create complications when trying to sell your vehicle or transfer ownership. Potential buyers or new owners may be hesitant to proceed with the transaction, as they will be responsible for clearing the outstanding tax before taking ownership.

How Can You Avoid The Consequences Of Overdue Car Tax? 

Paying your car tax on time is crucial to avoid the negative consequences that come with overdue car tax. By taking a proactive approach and staying organised, you can ensure that your car tax obligations are met promptly. 

Here are some steps you can take to ensure timely car tax payments:

  • You should be aware of when your payment is due so that you can plan accordingly and avoid any last-minute rush.
  • You can set up reminders on your phone or computer to notify you when your car tax payment is due. This will help you stay on top of your obligations and avoid any forgetfulness.
  • You may consider setting up a direct debit for your car tax payment can be a convenient option. By authorising automatic deductions from your bank account, you can ensure that your payment is made on time without any manual effort.
  • It will be helpful to maintain a record of your car tax payments and related documents. This will help you keep track of your payment history and easily reference any necessary information. In case of any disputes or inquiries, having organised records can save you time and avoid potential complications.
  • You can take advantage of the online services provided by the DVLA. Many tasks, including car tax payments, can be conveniently completed online. By utilising these services, you can save time and ensure a seamless payment process.

If you are unsure about any aspect of your car tax payment or have specific circumstances that require clarification, you should not hesitate to seek professional advice. You can easily find help online regarding how you can deal with your debts.

Sometimes, you may need to consider consulting with a tax professional or reaching out to the DVLA directly; as this can provide you with the necessary guidance to ensure timely payment of your car tax.


Understanding the consequences of overdue car tax is essential for vehicle owners to ensure compliance with the law and avoid unnecessary financial burdens. It is important to remember that when your car tax becomes overdue, the Driver and Vehicle Licensing Agency (DVLA) will take action to ensure payment is made. These actions will have both legal and financial consequences which will only make it more difficult to keep your car on the road with an overdue tax.


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Vehicle tax Direct Debit payments

DVLA enforcement of vehicle tax, registration and insurance offences – GOV.UK

Car Tax Enforcement