Define: Vehicle Excise Duty

Business, Legal & Accounting Glossary

Definition: Vehicle Excise Duty



Advertisement



Full Definition of Vehicle Excise Duty


Vehicle Excise Duty (VED) in the United Kingdom, often known as car tax, is an annual tax on the ownership of road vehicles, collected and enforced by the Driver and Vehicle Licensing Agency (DLVA).

Cars registered before March 1, 2001, are charged according to engine capacity. In the 2004 – 2005 tax year this was £165 for those with a capacity over 1549 cc, otherwise £110.

For cars registered on or after March 1, 2001, the tax is known as graduated vehicle excise duty (GVED) and is based on the level of carbon dioxide (CO2) emission. For the tax year 2004 – 2005 this varied between £55 and £165. GVED was announced in the March 1998 Budget to offer a small incentive to purchase vehicles with low emission levels.

Rates for other vehicles vary between £15.00 for motorcycles with an engine capacity under 150cc, to a maximum of £1,850 for the largest heavy goods vehicles (HGVs).

Owners of vehicles paying the tax are issued with a tax disc to be displayed on the vehicle. In the tax year 2002 – 2003, it is estimated that evasion of the tax equated to a loss to the exchequer of £206 million. In an attempt to reduce this, from 2004 an automatic £80 penalty (halved if paid within 28 days) is issued by the DVLA computer for failure to pay the tax within one month of the expiry of the previous tax disc. A maximum fine of £1,000 applies for failure to pay the tax, though in practice fines are normally much lower.

Any vehicle used or kept on the public road at any time during the tax period is liable. In other cases, a Statutory Off-Road Notification (SORN) is made by the registered owner, which indicates precisely where the vehicle is to be kept.


Advertisement




Cite Term


To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
https://payrollheaven.com/define/vehicle-excise-duty/
Modern Language Association (MLA):
Vehicle Excise Duty. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. April 07, 2020 https://payrollheaven.com/define/vehicle-excise-duty/.
Chicago Manual of Style (CMS):
Vehicle Excise Duty. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/vehicle-excise-duty/ (accessed: April 07, 2020).
American Psychological Association (APA):
Vehicle Excise Duty. PayrollHeaven.com. Retrieved April 07, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/vehicle-excise-duty/

Definition Sources


Definitions for Vehicle Excise Duty are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 22nd March, 2020