What Is The Best Date To Renew Car Tax?

If you are concerned about the best date for renewing your car tax, you will find detailed guidance through the following blog post as we discuss the factors that help determine when to pay your car tax to make sure that you pay your dues in time without running the risk of being fined for late payment; yet making sure that you are not overpaying your car tax.

What Is The Best Date To Renew Car Tax?

The best date to renew car tax is based on the following key factors:

• how soon your car tax is due to expire
• your choice of payment method
• the current date of the month

If your car tax is due to expire any time soon, the best time for you to renew your car tax is on an immediate basis; so that you can avoid the penalty of delaying your car tax payment. 

How car tax payments work is that the first car tax payment becomes due to the registered keeper of a vehicle when they first purchase a car (this can be a brand new car or a used one). 

This means that car tax starts from the day the owner takes ownership of the car and runs for an entire year. You can choose to pay your car tax as a lump sum payment for the whole of the year, on a six-monthly basis or by making a monthly payment. 

Keeping this as the sole factor of consideration, it is recommended to pay your car tax before it is due to expire; while keeping in mind that the DVLA will consider your car tax payment from the first date of the next month (6 months or year). 

For your own convenience, you may also choose to pay your car tax in advance up to 2 months before your car tax is due to expire; especially if you will be away from the UK during this time.

In the case of considering your choice of payment method for car tax, it is important to keep in mind that direct debit and cash payments are transferred much more quickly than cheques or postal orders. Therefore, it is advisable to keep in mind the date when your car tax is due to expire along with your choice of payment method to assess the best date for renewing car tax.

However, if you choose to pay your car tax using the direct debit payment method, you will not be able to choose the date of payment as your car tax payment will automatically be deducted from your bank account and transferred to the DVLA.

For instance, if your car tax is due to expire on the 30th of the current month and you use a cheque or a postal order for your car tax payment, the amount may not be transferred in time to the DVLA.

Finally, you must consider the current date of the month along with the other two factors discussed above so that you may assess the best date for paying your car tax. Since car tax is paid in advance, if you make monthly payments, the best date for paying your car tax will be the first few days of the month so that the DVLA can consider your payment as current and not late. 

How Is Car Tax Affected By The Date Of Expiry?

Car tax payments are greatly affected by how soon your current payment is due for expiry and the scheduled date for it as any payment made after the date of expiry will be considered a late payment with a possible fine added to the original tax due.

The expiration of your car tax will be based on the frequency of your car tax payments. This means that if you pay your car tax on a monthly basis, the date of expiry for your payment will be the last date of the current month. 

On the other hand, if you pay your car tax on a semi-annual or annual basis, the date of expiry in this case would depend on your earlier payment and the last date of the month that you’ve paid for. 

It is important to remember that it can take up to 5 working days for car tax payments to appear in DVLA’s online records. Therefore, considering this timeframe and the date of expiry of your current car tax, you will need to tax your vehicle accordingly.

How Is Car Tax Affected By The Date Of The Month?

How car tax is affected by the date of the month can be clearly witnessed from the fact that if you tax your car on the last day of the month, you will lose an entire month’s payment. 

For instance, if you usually pay your car tax on a monthly basis, you should pay your car tax between the 1st and the 5th dates of the month so that your payment can apply to the entire month.

On the other hand, if you pay your car tax anytime after the middle of the month (the 15th day onwards), you should keep in mind that your payment will only apply to the remaining days of the month, with a new payment due on the 1st of the next month.

It’s important to note that car tax operates on a monthly basis. If you opt to pay your car tax on a monthly basis and make your payment at the end of the month, it will be counted as the payment for the current month that is coming to a close. 

However, if you choose to pay your car tax every six months and make your payment at the end of a month, your payment will only cover five months in the future. 

Likewise, if you decide to pay your car tax annually and make your payment at the end of a month, it will be taken as an 11-month payment for the upcoming car tax term.

Conclusion:

With road tax rates increasing from £165 to £185 in 2023/2024, there is a genuine concern among vehicle owners about the best date for renewing their car tax to spread out the payment maximally. The above discussion helps to summarise the key factors of consideration when it comes to the best date to renew your car tax based on when it is due for expiry, your choice of payment method and the current date of the month.

References:

How to check when you should renew your car tax, how much can you be fined for missing deadline

Car tax calculator: When is it due for renewal and how much is it? | The Sun

Vehicle tax Direct Debit payments: Change how often you pay – GOV.UK