Hi Nick,
John said most of it -
In the UK all vehicles are liable to pay a Yearly Car Tax call Vehicle Excise Duty to allow it to be driven on the road.
Since 2001 it was based on CO2 emmissions and all vehicles are listed in production today.
So if you have a small Fiat 0.9 litre CC Twin Cylinder Engine car you pay £0 as it is low CO2 but if you have a Aston Martin Lagonda it will rise to over £1,000 for the 1st year then £475 per year.
http://carfueldata.dft.gov.uk/new-vehicle-tax.aspx
For Cars before 2001 there is another tables as they were not tested for CO2 so for a 2.0 ltr TR7 we pay £220 per year.
You can cash the Tax in anytime for a partial refund - so I taxed my car £ 121 for 6 months in January this year then at the end of January I went back to work abroad so sent it in for a refund of approx £85.
If your car is not taxed it must be SORNed ( Statutory off road notice ) - that tells the Government your car is not used on the road & does not need taxed but if you are found driving it on the road - you get a fine. All Police have Number Plate reconition equipment - from that they can tell if the car has insurance,MOT, Taxed stolen etc.
The camera can process 1,000's of number plates an hour - actually a good system as it stops people driving around with no insurance or MOT ( Annual roadworthiness test ).
They just park by the side of the road & it does it all automatically
If your car was made before 31st December 1972 - you don't have to pay Car Tax - just a perk to keep the voters happy.
You still have to apply for Car Tax - they send you a Tax Disc but it costs £0.