Chapter 5 · The UK government, the law and your role

Taxation and driving: Life in the UK test study notes

Taxes pay for public services such as roads, education, the police and the armed forces. Income tax is due on many kinds of income, including wages, self-employed profits, pensions and income from property and savings. Most employees pay through PAYE (Pay As You Earn): their employer deducts the tax from their pay. Self-employed people pay their own tax through self-assessment, by completing a tax return for HM Revenue & Customs. Almost everyone in paid work also pays National Insurance contributions, which help fund state benefits, the state retirement pension and the NHS. Your National Insurance number makes sure your payments are recorded, and young people are sent theirs just before they turn 16. You can drive a car from 17 and ride a moped from 16. Learners need a provisional licence and must pass a driving test to get a full licence. Drivers must be insured, most vehicles must be taxed, and in Great Britain vehicles over three years old need a yearly MOT test. Licences must be renewed at 70 and then every three years.

Key facts to remember

Taxes pay for public services such as roads, education, the police and the armed forces.
Income tax is paid on wages, self-employed profits, pensions, taxable benefits and income from property, savings and dividends.
PAYE (Pay As You Earn) – employers deduct income tax from wages.
Self-employed people pay tax through self-assessment, by completing a tax return.
HM Revenue & Customs (HMRC) is the government department that collects taxes.
Nearly everyone who is in paid work, self-employed people included, pays National Insurance, which helps fund state benefits, the state retirement pension and the NHS.
Too few National Insurance contributions can mean losing some benefits or a full state pension.
Young people are sent their National Insurance number just before they turn 16.
Anyone working in the UK needs a National Insurance number, but you can start work before you receive one.
Minimum ages: 17 to drive a car, 16 to ride a moped.
Learners need a provisional licence; a full licence requires passing a theory and practical driving test.
In Northern Ireland, newly qualified drivers must display an 'R' (restricted) plate for a year after passing their test.
You can drive on a licence from another country for up to 12 months; after that you need a full UK licence.
All drivers must have valid motor insurance; driving without insurance is a serious criminal offence.
Vehicle Excise Duty (road tax) must be paid on most vehicles and cannot be passed on to a new owner when a vehicle is sold; paper tax discs ended in 2014.
A vehicle kept off the road and unused must be declared to the DVLA with a Statutory Off Road Notification (SORN); it then does not need to be taxed.
In Great Britain, vehicles over three years old need an MOT test every year, and driving without a valid MOT certificate is an offence. In Northern Ireland the first test is at four years.
Licences must be renewed at 70, then every three years.

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These notes summarise the official handbook, Life in the United Kingdom: A Guide for New Residents (3rd edition), which all the test questions come from. Try the free chapter 5 questions.