Britannia Banner

Is Road Fund Licence Included in a Lease?

When it comes to owning and driving a vehicle in the United Kingdom, there are various responsibilities and costs involved. One such obligation is the payment of a Road Fund Licence, also known as Vehicle Excise Duty (VED) or road tax imposed by the government on all roadworthy vehicles.

What is Road Fund Licence?

The Road Fund License, or Vehicle Excise Duty (VED), is car tax that drivers are required to pay to use public roads legally. It is a legal requirement imposed by the government to help fund the maintenance and improvement of road infrastructure throughout the country.

Is Road Fund Licence Included in a Lease Agreement?

One of the benefits of leasing is that road fund licence is included in most lease agreements with Britannia Car Leasing. Including the road tax with our agreements gives you peace of mind and one less cost to worry about. Typically, the licence is renewed by the finance company on an annual basis and you are notified once this has been done.

Tax Disk
Tax Disk

Purpose and Allocation of Funds

The funds generated from the Road Fund Licence are crucial for maintaining and developing the UK's road network. These funds are utilised for a variety of purposes, including repairing potholes, upgrading highways, implementing safety measures, and managing traffic flow. They contribute to the overall improvement of road conditions, ensuring safe and efficient journeys for all road users.

Determining Vehicle Excise Duty Rates

The amount of Vehicle Excise Duty payable varies depending on several factors. The primary factor is the vehicle's CO2 emissions, as this directly impacts the environmental impact of the vehicle. The government has implemented a sliding scale of charges, where vehicles with higher CO2 emissions incur higher duty rates. Additionally, the type of fuel and the vehicle's list price also influence the applicable duty rates.

The VED rates are regularly reviewed by the government and can be subject to changes in policy and environmental goals.

Exemptions and Discounts

Certain vehicles and drivers are exempt from paying Vehicle Excise Duty. Electric vehicles (EVs) and other zero-emission vehicles, for example, are currently exempt from VED. Additionally, certain disability-related exemptions and discounts are available for individuals with specific mobility needs.


The Road Fund Licence, or Vehicle Excise Duty, is an essential component of owning and operating a vehicle in the UK. It not only helps fund the maintenance and improvement of road infrastructure but also plays a role in promoting environmentally friendly transportation. Understanding the Road Fund Licencse requirements, including rates, payment methods, and exemptions, is vital for all motorists to ensure compliance with the law and contribute to the continued development of the country's road network.