You cannot drive a motor vehicle on a public road in the United Kingdom without having: valid road tax (Vehicle Excise Duty); vehicle insurance and an MOT certificate (the latter applies only to vehicles more than 3 years old).
Firstly it's illegal not to pay it. As for where it goes, well it's shared out along with other taxes we pay, but it's safe to say that a lot of it goes towards our road infrastructure, widening, building bridges and so on. Some of it is also used by local councils and the Highways Agency for repairing and resurfacing roads and for the creation of parking facilities.
Shortly before your tax is due for renewal, you will be sent a reminder either via post or email. You can then renew either online or by phone. If you are renewing your car tax online or by phone, then you will just need the reference number from the reminder and the means to pay by debit or credit card.
You will have the option to pay in monthly instalments or for the full twelve-month period. The fees vary depending upon the age and engine size (plus CO2 emissions) of your vehicle. Your reminder will tell you how much you should pay, but you can find out online or via phone.
To drive on the roads you must have valid insurance, tax and MOT - In recent years insurance companies have had to record all motor insurance policy details on the Motor Insurance Database (MID), so the DVLA has a record of whether a car has valid insurance or not. This is why when you renew online you do not have to provide your insurance details. A similar system operates for MOT certificates. Each time a registered MOT centre issues a new MOT certificate in respect of a vehicle, they submit the details to a central computer operated by the VOSA (Vehicle Operator and Standards Agency).
Disclaimer: The information in the article is for general purpose information only and should not be constituted as legal advice. This article has been produced by a third party and Jardine Motors does not take any responsibility for the completeness, accuracy, or reliability with respect to the website or the information provided. Article last updated March 2016.