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Do you pay VAT on car tax?

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The United Kingdom does not charge Value Added Tax (VAT) on road tax. Road tax in the UK is officially known as Vehicle Excise Duty (VED) or simply car tax. It is an annual tax that car owners must pay to use public roads and is based on factors such as the car’s engine size, fuel type, and carbon dioxide emissions.

Vehicle Excise Duty is separate from VAT, which is a consumption tax applied to the value added to goods and services at each stage of production or distribution. VAT is typically applied to most goods and services in the UK but not on road tax.

However, please note that tax regulations can change over time, and it’s essential to check the latest guidelines and regulations with official sources or a qualified tax advisor to ensure you have the most up-to-date information.

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