When was the first disc issued?

The 1861 Locomotive Act introduced taxation of all steam-powered vehicles, and was followed in 1903 by the Motor Car Act, which set an annual registration of £1 for cars - around £74 in today’s money. The displayable tax disc was introduced in 1919, when the law stated that it must be on show at all times.

How much tax is generated?

The treasury makes an estimated £4.6bn a year from vehicle excise duty, but tax evasion is estimated to cost £217million in lost revenue. In the 2006-07 financial year, it was estimated 2.19 million untaxed vehicles were being driven on the UK roads - that’s one in every 15 cars.

Are classic cars exempt from tax?

Firstly, cars registered before the 1^st March 2001 don’t use the CO2 based system. If your car’s engine capacity is less than 1.550cc, you pay £120 a year, while those above £185 a year. Vehicles built before the 1^st January 1973 qualify for a free tax disc under historic vehicle legislation.

What’s in store in the future?

The seven band set-up more than doubles in size to cover 13 bands (A-M) in 2009. Band A (under 100g/km) will still be free, while Band M will be for cars above 255g/km and will cost £440. Watch out if you have a pre-2006 model with over 225g/km emissions - your road tax could rise by £230.