Van Leasing and Vehicle Excise Duty
If you want to drive any normal vehicle on the roads, one of the legal requirements you must have is road tax. It doesn't matter if you own a van outright or you want to start a leasing contract, you shouldn't be on the road if you don't have a road tax disc that's valid. Road tax is commonly known as Vehicle Excise Duty, with the money you pay going to the government and the local council.
Since its birth in 1888, vehicle tax has been disputed and debated on a regular basis. It's easy to see why, with vehicles being an essential part of day to day life. There's just so much a vehicle gets used for, whether it be just for transport or for the use within a business, without a sufficient mode of transport there would be a real struggle.
For a lot of people it's instinct to try to negotiate the best deal possible when applying for road tax. It may come as a surprise that road tax is non-negotiable, with it being figured out on certain criteria that the vehicle is classified under. One of the reasons it's debated so much is with drivers also having to pay congestion charges, parking charges and fuel duty.
Are there any vehicles that don't need a road tax disc?
All vehicles need a road tax disc as it's a legal requirement, although in some cases the vehicle owner doesn't have to pay anything. The following list explains the people that don't have to pay for road tax.
Even though the following requirements mean that the van owner doesn't have to pay for road tax, it's still essential to apply for one. You are then sent a nil value disc which you don't have to pay for.
Not all electric vehicles are actually exempt from road tax. It falls under a simple requirement. The actual electricity that fully powers the vehicle has to be provided by either an electrical storage battery or a different external source. In the case that the vehicle needs to be connected to an electricity source to run then you don't need to pay for road tax.
For a vehicle to be considered historic it must have been manufactured at least before 1st of January 1974. This means that any vehicle created before this date means you don't have to pay for road tax. A historic vehicle can cover a number of different forms of transport, whether it be a car, van or motorbike.
This may seem like an unusual requirement, but a number of mowing machines actually need to have a valid road tax disc. A mowing machine can be exempt as long as it is designed, built and used for the sole purpose of cutting grass. This doesn't cover tractors or tow gang mowers.
Mobility scooters, powered wheelchair and similar carriages
The majority of these vehicles are normally exempt from road tax, but they must follow certain specific requirements. When any of these forms of transport are on the road, they should only have a maximum speed of 8 miles per hour. When they're on the pavement or a footpath that's similar, the vehicle should only be limited to 4 miles per hour.
A vehicle that is used by a person that suffers from a disability
If a person suffers from a disability, and is the main person that will be using the vehicle, it's possible to claim for disability exemption when you apply for your tax disc. To find out if you're able to apply for disability exemption, the government have a page that can give you all the information you need.
Disabled passenger vehicles
If a vehicle is used by an organisation that helps to provide transport for disabled people, not including ambulances, then they are exempt from paying road tax.
A vehicle that is only used for horticulture, agriculture or forestry
This requirement can cover a number of vehicles such as tractors, a vehicle that has a light agricultural engine and a vehicle that is used purely off road. One of the most important things about this requirement is how if the vehicle used for only short journeys, they can be exempt from road tax.
The journey should only be from a public road and the land they occupy, with the distance being no longer than 1.5 kilometers.
No matter what type of steam powered vehicle you have, you don't have to pay for road tax.
How much can road tax cost?
Depending on the vehicle you have, the road tax can cost something completely different. There are three main factors that affect how much you pay for road tax:
- How much carbon dioxide your vehicle produces
- The overall engine size
- The fuel type of the vehicle
There's also a special rate that affects how much road tax you have to pay, solely depending on the time when your car is registered. The costs can vary quite drastically, with the lowest being £10.00, and the highest being £100,000; as stated previously, it depends on what your vehicle is.
Before you make the decision to lease any sort of vehicle, it's important you have a clear understanding of how much road tax you'll end up paying. As the price can vary by a large amount, knowing how much you have to pay can give you an idea if you can afford the vehicle or not.
An important part of road tax is how the costs change depending on how you pay for it. You have the decision to purchase a road tax disc that lasts for either 12 or six months. The six month payment rate may seem cheaper than the latter, and it is in the short term, but if your plan is to get another six month disc it costs more than getting a 12 month road tax disc.
When you get a road tax disc for a van, the actual way the price is worked out is slightly different than that of a car. In simple terms, if your van was registered pre 2001, the engine size affects how much the road tax is. It pretty much depends on how high the cc of the engine is, with the higher it is, the more the road tax costs.
An important thing to bear in mind is that company vans are worked out in a different way. If the overall payload is at least a tonne then you pay a flat rate that benefits in kind of a minimum £3,000, allowing anybody that uses the van to have a £500 annual tax bill. Free fuel benefit charges exist as well, when including tax can cost either £200 or £100.
This may seem easy to understand, but working out if you're eligible for this scheme often ends up complicated, as you need to work out the difference between a van that's used for personal use and a van that is purely used for business.
If the van you use has the purpose of calling in on customers, making deliveries and other similar commercial uses, with the only private use being commuting from location to location, you don't have to pay as much tax. In the case that an employee uses a van for the previous purposes it's possible they can eligible for PAYE tax (Pay As You Earn).
When a van is used and the person that drives believes that there shouldn't be any tax paid, it's important that records are kept that have proof that the actual van is purely used for the use of work. The only private use should be driving between home and work.
What does road tax pay for?
Don't be fooled by the name, road tax doesn't only pay for the roads. As a matter of fact, it goes towards a number of uses, with one of the main things being for infrastructure projects. These are incredibly important as it has a massive effect on the majority of vehicle, with it paying for new roads, construction of tells and widening of roads.
Another thing your road tax gets used for is projects that your local government will undertake. These projects are what you're more likely to see, as it's based in smaller areas. One of the best and most popular projects is the extension of a car park and its facilities, which is something that helps the majority of people.
In a lot of cases, these projects can end up working towards some of the larger and more important issues. If these cases arise, they are normally helped with both income tax and council tax. Even though road tax is the subject of debate a lot of the time, it's good how it has a positive effect on the local area.
What happens if someone doesn't pay for their road tax?
This may come as a surprise, but a lot of people believe they can get away with not paying road tax and there would be no consequences. If you have a vehicle that you wish to leave on a main road or simply won't be driving, you need a SORN (Statutory Off Road Notification), as if you don't your van can end up being clamped or towed away.
It isn't something that you can simply get out of. Even if your vehicle is hidden away off the road, it will still be checked. The DVLA (Driver and Vehicle Agency), do a check on their records on a regular basis. This makes sure that they are able to notice any untaxed vehicles, and they can then enforce action against the owner.
You don't only have the DVLA to deal with as well. They have a partnership with NSL Services Limited, which enforce the majority of parking and vehicle restrictions through the use of clamping. They use an automatic number plate reader which assists them to target, tow and even clamp any vehicle that doesn't have road tax.
If the police see a vehicle that doesn't have road tax, they will end up stopping you. You'll have to pay a fixed penalty of £80, and you'll have to pay for a tax disc as well as any money you may already owe. A member of the public is able to report an untaxed vehicle online.
As previously stated, some people believe they can get around paying for road tax by declaring SORN, even though they still use the vehicle. If a person is caught when doing this, they will be charged £5,000, including two years in jail.
If a vehicle is clamped, it's up to the owner to pay for it to be removed. You won't be able to simply pay for release either, as you are required to show physical proof of a road tax disc that's valid. If you simply avoid paying, it will result in your vehicle being impounded, which means that you have to pay for the storage charge on a regular basis.
As time goes on and the vehicle simply isn't paid for, it will either be sold or crushed. All of this hassle could have been completely avoided if the road tax was paid for, which we're sure you'd agree is a lot simpler.
LeaseVan and road tax
Here at LeaseVan, we intend to make sure any leasing contract is as hassle free as possible. That's the whole point of leasing, so we make sure that your road tax is included in your monthly payments.
By doing this you don't have to worry about applying for a road tax, getting to a post office or taking time out of your day. You don't want to be paying for a van that you can't use, so with you already having your road tax paid for, it's one less thing for you to worry about.
How do you feel about road tax? Do you agree on what it's used for? Get in contact today if you want to learn more.
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