Why driving without tax doesn't (usually) invalidate your car insurance

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How not having tax affects insurance
Untaxed drivers can still claim
Why you need road tax
You need tax straight away
Getting tax on other people's cars

If your car isn’t taxed, this doesn’t (usually) invalidate your car insurance. But it’s still really important to get your tax sorted out.

Your insurance is (usually) still valid without tax, but it depends on your insurer

Generally, your insurance is still valid even if your tax runs out. But different insurance companies have their own rules.

Because of that, you’ll need to check your car insurance. Otherwise you could get caught out.

Untaxed drivers can still claim on your insurance

If you're in an accident that’s your fault, and the other driver has an untaxed car, they can (usually) still claim on your car insurance.

Plus, not having tax doesn’t automatically make an accident their fault. So if the accident is your fault, their not having tax doesn’t change things.

You can still report them for not having tax, if you want. But it won’t change anything about the insurance claim.

Why you really (really) need road tax

You can get a hefty fine for not having tax

If your car isn’t taxed, you might be slapped with a big fine.

If you don’t pay your tax bill, HMRC can come after you for the tax you haven’t paid.

You’ll also get a fine. And it’ll be at least £80. It’s normally halved if you pay it within 28 days. If you don’t, it can go up to more than £1,000.

If you’re stopped by the police driving an untaxed car, you could get an instant fixed penalty notice (FPN) of up to £1000.

The only time you don’t need to tax your car is if you’ve declared a “Statutory Off-Road Notification”, or SORN.

Insurance companies may penalise you

It’s not just the HMRC you have to worry about. If you’re caught driving an untaxed car, you might end up in trouble with your insurer too.

Depending on the insurer, they might cancel your policy, because a lot of insurance companies really don't like driving convictions.

And if your insurance gets cancelled by your insurer, you might find it difficult to get insured in future. And even if you can get insured, your price will probably go up.

You need to tax your car as soon as you own it

New and second-hand cars

Tax isn’t switched from the old owner to you when you buy a car. So if you buy a new car, you’ll need to get it taxed straight away.

You can’t drive a car on someone else’s tax, either. It gets cancelled once the ownership of the car is switched over. For example, if you buy a car in January that is taxed until March under the old owner’s name, you can't use the tax.

You’ll need to get your tax sorted as soon as it’s bought. As with insurance, there’s no grace period.

Again, your insurance may still be valid even if your car’s not taxed, but driving the car is still illegal and can still land you with a fine.

Selling your car

If you’re selling your car to someone else, you still need to keep it taxed.

Firstly, you'll need to tell the DVLA. You can do this by sending them the relevant bit of your V5C form (the paper document issued by the DVLA to you to confirm proof of ownership and details of your car).

If you don’t keep your car taxed, and it’s not SORNed, you could end up with a £1,000 fine.

On the bright side, if you have any tax left over on the car, you'll get a refund.

For example, if you sell your car on January 1st, but it was taxed until April 1st, you'll get back 3 months’ worth of tax (for January, February, and March).

But if you sell your car in the middle of the month, you won’t get a tax refund for that month. It’s only full unused months.

It’s worth bearing in mind that surcharges don’t get refunded. That means if you’ve paid in instalments, you could miss out on a refund.

Transferring ownership of your car

Even if you’re transferring ownership of your car to someone else (like a friend or family member) you’ve still got to get the tax sorted.

Even though you’re not selling the car, you’ll still have to tell the DVLA you’re transferring the car ownership. Same as you would if you were selling it.

Again, you’ll get an automatic refund for any left-over tax. Or you can cancel your direct debit.

But if you’re taking ownership of a car (even if you’re not buying it) you’ll still need to tax the car or report it as off the road (SORN) as soon as it belongs to you.

Getting taxed on other people’s cars

Being insured on someone else's untaxed car

When you’re driving a car, you’re supposed to check that it’s taxed and insured. Even if you’re not the owner or registered keeper.

This is the case if you’re a named driver, or if you’ve taken out temporary car insurance to drive someone else’s car.

Even so, if you are stopped by the police, you’ll be in trouble. Along with the owner.

Sorting out your own car tax

Finding out if your car is taxed

It’s easy to find out if your car is taxed.

You’ll just need your car’s number plate.

Renewing your tax

When it's time to renew your car tax, you should get a reminder letter (called a V11 letter) in the post.

Once you’ve got this, you just need to put this number into the government’s online tax service and follow the next steps.

If you don’t have a V11 reminder letter, you can also use the number in your V5C log book.

If you’ve just bought a car and don’t have a log book yet, you should have a number on your V5C/2 supplement to renew your tax. This is the part of the current log book that the previous owner rips off and gives to you when you buy it.

One bonus of buying a car from a dealership is that they may well sort out the tax for you. But make sure you double-check this before you drive off.

Updated on 1st October 2020

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