Tax collections serve as the revenue for governments through which they are able to provide public goods such as roads, infrastructure, schools and hospitals to the general population. This article primarily discusses the role of the road tax and the reason why vehicle owners get a V11 reminder. For a holistic view of the UK taxation system, some other common taxes are also described for the readers’ benefit. 

When Do I Get A V11 Reminder?

Car owners receive a reminder from the Driver and Vehicle Licensing Agency around three weeks before their vehicle tax is about to expire. This is called a V11 reminder. This letter can be taken to the nearest local post office which has car tax facilities and used as a reference to pay your car tax. If a vehicle owner loses their V11 letter, they can use their 11 digit reference number from their logbook known as V5C.

To pay your car tax online from the post office, you will need the following documents;

  • Your V11 letter
  • An MOT test certificate
  • The amount of payment mentioned in the V11 letter

If you have misplaced your V11 letter or your V5C, your car tax can still be renewed through the local post office. 

At this time, you should also apply for a new Registration Certificate using a V62 application form A for £25.00

If a vehicle owner fails to pay their car tax, they may face an initial fine of up to £80 reminding you to clear your tax dues within 28 days. If you fail to pay the fine within the given time, this fine can increase to up to £1000 and the defaulting party be taken to court.

However, if you do not intend to run your car on public roads, you are not required to pay your car tax. Instead, you should apply for Statutory Off Road Notification (SORN) through your local post office dealing with car tax.

What Is A V11 Reminder?

If you have purchased or registered a car to your name, you will be required to apply for a Vehicle Excise Duty (VED). Otherwise, the DVLA will send you a V11 reminder to do so. The purpose of this reminder is to set up your vehicle tax. You will receive an annual reminder to renew your car tax.

 The V11 reminder is divided into three sections. Section 1 shows the name of the person in whose name the vehicle is registered, their address, the registration number of the vehicle as well as the date when the current tax is due to expire. Section 2 states the option for paying the tax, registering the car as SORN (if it is not going to be used) or state that you are no longer in possession (or ownership) of the car. Section 3 indicates the modes of payment for your car tax. You can choose to make the payment online, through phone or a local post office that is registered to deal with car tax. 

Who Has To Pay Road Tax In The UK?

Anyone with a roadworthy vehicle in the UK is required to pay road tax (also referred to as car tax, vehicle tax or road fund license. This is a mandatory, annual payment enforced by the Driver and Vehicle Licensing Agency. The amount due on a vehicle owner depends on the type of vehicle they drive as well as the level of co2 emissions from their car.

The following vehicles are exempt from road tax:

  • Cars used by a disabled person
  • Disabled passenger vehicles
  • Electric vehicles
  • Historic vehicles
  • Mobility scooters and powered wheelchairs
  • Mowing machines
  • Steam vehicles
  • Vehicles used for agriculture, horticulture and forestry

You can check vehicle tax online to confirm if your car has been taxed.

How Much Road Tax Do I Have To Pay In The UK?

Road tax or Vehicle Excise Duty in the UK is calculated on the basis of a few factors including the engine size and CO2 emissions of the car.

However, the UK road tax system is divided across two separate rates. The first-rate applies during the first year of a car on the road when its CO2 emissions are also accounted for while calculating the tax rate. It may range from £0 for zero-emission cars to £2,245 for cars that emit 255g/km or more.

From the second year onwards, the CO2 emissions will not account for road tax, rather the original cost of the car will be considered for calculations.

Cars that are valued at or above £40,000 will be taxed a further £335 annual supplement that runs for five years. After this time-lapse, they will be taxed at the current tax rate applicable during the tax term.

The current (2021-22) road tax is set at a flat rate of £155. This is an increase from £150 in the 2020/2021 financial year) to adjust for inflation. There’s a £10 annual discount for alternatively fuelled vehicles such as hybrids, mild hybrids and plug-in hybrids. Therefore, their owners pay £145 annually.

What Are The Different Taxes That I Have To Pay In The UK?

According to a general estimate, an individual pays one-third of their income in the form of taxes in the UK. While the amount of tax one pays depends on the scale of their income, some people will pay a higher tax perhaps due to the property that they own or inheritance that they may receive.

There are different types of taxes under the UK taxation system. Direct taxes include PAYE (Pay As You Earn) and National Insurance. These account for 20 per cent of an individual’s income. On the other hand, indirect taxes include VAT, council tax as well as duties on alcohol and petrol. 

Therefore, basic taxes in the UK include the following:

  • Income Taxes 
  • Property Taxes 
  • Capital Gains 
  • UK Inheritance Taxes 
  • Value Added Tax 

These are all progressive taxes; which means that the scale of taxes increases with an increase in income.

How Much Income Tax Do I Have To Pay In The UK?

Direct taxes are automatically deducted from your wages, income or pension before you receive them. This is termed as Pay As You Earn. Anyone earning equal to or less than £12,750 is not eligible for PAYE as the amount is considered under the law as an individual’s personal allowance. 

Incomes above the minimum cap are taxed at an incremental rate of 20 per cent to 45 per cent depending on whether an individual belongs to the basic, higher or additional tax rate band. Below are details of these bands:

  • 0 per cent income tax when income is up to £12,570
  • 20 per cent income tax when income is between £12,571 and £50,270 
  • 40 per cent income tax when income is between £50,271 and £150,000 
  • 45 per cent income tax when income is above £150,001

If you are self-employed, you are required to file a self-employed tax return in order to pay your taxes through a self-assessment. 

What Are Direct Taxes?

In addition to income tax, direct taxes include National Insurance. During the last fiscal of 2021-22, employees paid 12% on earnings exceeding £9,568 up to £50,270 a year, and 2% on earnings above this.

Salaried individuals have NIC deducted from their wages directly by their employer. While self-employed people are required to submit a self-assessment tax return.

Who Has To Pay Property Tax?

According to The complete guide to the UK tax system | Expatica the UK has the second-highest property taxes in the world at the moment and tax revenue through this model accounts for more than 12 per cent of all tax collections.

The two forms of property tax in the UK include stamp duty and council tax. Stamp Duty tax is paid when someone buys a property in the UK over a certain threshold. The tax applies to residential properties that have a market value of above £125,000, or to non-residential land and properties that are valued at more than £150,000. Here is an online calculator to help with your property tax assessment. 

Council tax is a local tax collected by the local council to provide community-based services to their residents.

What Is A Capital Gains Tax?

Whenever someone sells an asset, there is a difference between the purchase price and the selling price. If you receive gain while selling, this is a capital gain and the incremental amount will be taxed. These may include the following:

  • Personal possessions that are valued at or above £6,150 (does not include vehicles)
  • Real estate property that cannot be claimed as your main home
  • Your main home if it is being rented or used for business
  • Shares (those which are not in an ISA or PEP)
  • Business assets
  • Cryptoassets (only in certain cases)

Who Collects Tax Revenues In The UK?

The HMRC collects and administers tax collection in the UK. HMRC administers the following central taxes while local governments collect council tax:

  • Income tax
  • Corporation tax
  • Capital gains tax
  • Inheritance tax
  • Insurance premium tax
  • Stamp, land, and petroleum revenue taxes
  • Environmental taxes
  • Climate change and aggregates levy and landfill tax
  • Value-Added Tax
  • Customs duty
  • Excise duties

Who Is Tax Exempt In The UK?

Individuals may apply for tax exemption if they face  the following conditions:

  • If someone is a tax resident for at least one year out of the previous three years 
  • They have spent less than 16 days in the UK during the previous tax year
  • They are not a UK resident

The same applies in case:

  • Someone is not a tax resident for the previous three years
  • They have spent less than 46 days in the UK

Conclusion:

Road tax is mandatory upon vehicle owners with a roadworthy car. This annual payment can conveniently be paid online, a phone call or by visiting your local post office registered to deal with car taxes. Reminders are sent every year to vehicle owners to enable them to pay their tax before the due date. This is called a V11 reminder. In addition to a road tax, there are some common taxes that apply to different individuals such as income tax, property tax or capital gains tax. The amount that each individual pays in the form of these taxes depends on their personal circumstances and this is the reason why amounts may vary from person to person.

FAQs: When Do I Get A V11 Reminder?

When should I receive my V11 reminder?

Vehicle owners receive their V11 reminder anytime after the 5th day of the month prior to the month that their tax is due. This is an annual tax mandatory to be paid by all vehicle owners in the UK. 

Can you get a new V11 reminder?

Yes, you can get a new V11 reminder if you have missed the original one or misplaced your registration certificate (known as V5C). You can do this by renewing your vehicle tax at the local post office. You will be required to pay £25 to pay for the re-issuance of your V11 reminder and V5C.

How do I find my V11 reminder reference number?

Your V11 reminder reference number is mentioned on your tax disc renewal letter in a 16 digit form. You will also find this as an 11 digit reference number in your logbook (V5C). 

Can I get my V11 number online?

Yes, you can get your V11 number online by visiting this link www.gov.uk/vehincle-tax However, you will need your 16 digit reference number or your V5C to apply.

When should I receive my car tax reminder?

If you are the registered owner of an eligible vehicle in the UK, you can expect to receive your car tax reminder from the DVLA three weeks before it is due. This is usually after the 5th day of the month prior to the month that their tax is due.

References:

Tax your vehicle without a V11 reminder – GOV.UK

Vehicle tax

Tax your car

DVLA-car tax

Income tax calculator 2022-23, 2021-22 and 2020-21

UK Tax Calculators

HM Revenue & Customs – GOV.UK

Income Tax – GOV.UK

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John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.