Drivers paid over £500,000 in fines last year for not applying to tax vehicles which cost nothing to tax, data obtained by shows.

Figures released under the Freedom of Information Act reveal that between April 2017 and April 2018 the Driver and Vehicle Licensing Agency (DVLA) issued 34,012 penalties to the registered keepers of 'nil-rated' vehicles - vehicles which don't cost any money to tax.

Although most motorists have to pay each year to tax their vehicles, for certain motors with no or low emissions, such as electric cars or Citroen C1s and Peugeot 107s registered pre-April 2017, you don't have to pay anything. However if you plan to use one of these vehicles on the road you DO still have to apply to tax it - even if you pay nothing - to make sure it's licensed.

If you don't, you risk being hit with a hefty penalty fine of up to £80, and you could even be taken to court if caught on the road. Over the last three years a total of 71,060 penalties have been issued to motorists for failing to tax nil-tax vehicles - and more than £1.1 million in fines has been paid.

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How many people are being fined?

Here's what the data we've obtained shows:

Number of penalties issued for nil-rated vehicles

Year Penalties issued (1) Total amount paid (2)
Apr 2015 - April 2016 12,917 £200,564
Apr 2016 - April 2017 24,131 £386,540
Apr 2017 - April 2018 34,012 £535,872
(1) Includes late licensing penalties issued by post and on-road penalties. (2) May not include payments for all penalties issued that year as drivers sometimes pay fines in a later tax year.

The most recent figures available from the DVLA show that in 2015 there were almost three million nil-rated vehicles in the UK.

The DVLA wasn't able to give a detailed explanation of why the number of penalties is increasing, but it's likely because the number of nil-rated vehicles is on the up - for example, as electric cars and low emissions vehicles become increasingly popular.

If you fail to apply for tax on a nil-rated vehicle you could receive a late licensing notification by post and be fined £80, though this will be halved if you pay within 33 days. You also risk receiving an on-the-road fine if spotted by police while driving - the amount can vary, but if taken to court you could be hit with a maximum penalty of £1,000.

'I just thought the letter had been an error and ignored it'

We've heard from several MoneySavers who've been fined for not taxing nil-rated vehicles, such as MSE forumite Dave Major, who drives a Ford Fiesta Eco.

Dave, who works as a musician, told us: "Six months after getting my car in 2016 I got a letter through regarding the tax. But it said that we had £0 to pay so I just thought the letter had been an error and ignored it.

"A month or so later we got a letter saying that we hadn’t taxed our vehicle and had to pay a fine - we obviously paid it and then I ‘taxed’ the vehicle."

'It sounds bizarre - but many fall foul of this peculiar process'

Steve Nowottny, news and features editor at MoneySavingExpert, said: "It sounds bizarre that you can get fined for not applying to tax a vehicle which doesn't need to have tax paid on it. But these figures show that each year thousands are getting caught out - so make sure you're not one of them.

"While the DVLA may argue it's important drivers follow the rules so it has accurate records, evidently something's going wrong. The fact so many people are falling foul of this peculiar process suggests at the very least it needs to communicate more clearly with motorists.

"If your vehicle's nil-rated, make sure you diarise to apply to tax it each year, and if you're contacted by the DVLA don't ignore it - even if you're told you're owed £0."

How can you be fined for not paying tax... despite not owing any tax?

Most vehicles cost money to tax - the amount depends on what the vehicle is, when it was registered, which fuel it uses, and how much CO2 it pumps out. For a car first registered between 1 March 2001 and 31 March 2017 with emissions over 255g/km, for example, you'll pay £555 each year if you pay in one single payment.

Some vehicles, such as cars first registered between 1 March 2001 and 31 March 2017 with emissions of up to 100g/km, don't attract any fee (see full details of nil-rated vehicles on the Government website). However even if you don't have to pay any tax, the DVLA says a vehicle must be licensed (unless it's declared off-road, in which case you must make a Statutory Off Road Notification).

What's confusing about this licensing process is that the Government itself describes it as 'applying for vehicle tax', even though there's nothing to pay. The website says "You still need to apply for vehicle tax even if you don't pay vehicle tax", while a warning letter we've seen informs motorists they must "tax your vehicle; even if you don't pay".

A DVLA spokesperson said: “The law is clear that all vehicles must be licensed or declared off road by making a Statutory Off Road Notification (SORN), and this also applies to nil-rated vehicles that do not attract a fee.

"This regular contact means we have an up to date record of the keeper of the vehicle which helps ensure we have accurate records, which of course helps police and emergency services should they need to trace or contact the keeper of a vehicle, or in the event of a safety recall. The vast majority of motorists licence their vehicles correctly and on time.

"We send reminders to all keepers on our records to let them know when their vehicle tax renewal is due, which is why it’s so important they keep their address up to date. If the keeper does not tax or licence the vehicle we will then issue a last chance reminder. This applies whether the vehicle is nil-rated or whether there is an amount of tax to pay.”

How do I know if my vehicle is taxed and how do I tax it?

Road tax is recorded online, and it's the responsibility of the 'keeper' of the vehicle - the person who is using the vehicle rather than necessarily the owner - to make sure it's sorted. To check if your vehicle – or anyone else's – is taxed, go to and enter the registration number.

If you're the registered keeper of a vehicle,and you have not paid tax on it, applied to tax it while paying nothing or made a SORN, you will be sent a last chance reminder - don't ignore this, even if you are told you owe £0.

If you have to pay, paying annually is cheapest. Payments can be made via, or at the Post Office. Here are your options:

  • You can pay by annual direct debit. Or for a 5% surcharge, you can pay by six-monthly or monthly direct debit.
  • You can make a one-off payment instead. This can be for the year – or for a 10% surcharge, for six months. If you do this, make sure you renew on time.

It's worth noting that if you have money to pay, the direct debit option also ensures you won't forget to renew, but you CAN'T do this if you have a nil-tax vehicle. So those who pay tax can register once and it'll be renewed automatically, while those who have nothing to pay must remember to apply to 'tax' their vehicle each year.