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Car tax bands explained

Car tax bands explained

Changes to vehicle road tax, which came into force 1 April 2018, have led to further increases in VED for new cars – with higher polluting diesels being hit the hardest.

If you’re in the market for a new car, our guide to current car tax bands will help you understand exactly how much VED you’ll need to pay.

Daniel Hutson
From the Motor team
5
minute read
posted 31 OCTOBER 2019

What is car tax?

Car tax is the Vehicle Excise Duty (VED) levied on almost all vehicles by central government. Since 2001 all cars have been charged a rate of road tax when they’re first registered, which is based on their CO2 emissions.

What are the car tax bands?

As of 1 April 2018, cars fall now into one of the four following tax band categories depending on when they were first registered as a brand-new vehicle.

1. Cars first registered before 1 March 2001

These older cars will be charged a standard VED rate based on the size of their engine:

  • Less than 1549cc - £155
  • More than 1549cc - £255

2. Cars first registered between 1 March 2001 and 31 March 2017

Depending on the amount of CO2 they emit, cars will fall into one of 13 tax bands lettered from A(less than 100 g/km) to M (over 255 g/km). So, a car in band A will pay £0 while a car in band M will pay an annual VED rate of £555.

Alternative fuel cars (hybrids, plug-in hybrids, LPG, CNG, biofuel) that fall into bands A to M pay £10 less than petrol or diesel models in the same band.  

Cars first registered before 23 March 2006 will pay a maximum cap of £315 even if they emit more than 225 g/km of CO2.

You can check what band your vehicle falls into on the DVLA vehicle tax rate tables.

3. Car first registered from 1 April 2017

Petrol and diesel cars first registered on or after 1 April 2017 pay a first year rate based on the vehicle’s CO2 emissions and then a standard annual rate of £140 from year two onwards.

Alternative fuel cars pay £10 less in the first year, then a standard annual rate of £130 from year two onwards.  

First year rates for petrol, diesel and alternative fuel cars first registered on or after 1 April 2017:

CO2 g/km Petrol/diesel Alternative fuel
0 £0 £0
1-50 £10 £0
51-75 £25 £15
76-90 £105 £95
91-100 £125 £115
101-110 £145 £135
111-130 £165 £155
131-150 £205 £195
151-170 £515 £505
171-190 £830 £820
191-225 £1,240 £1,230
226-255 £1,760 £1,750
Over 255 £2,070 £2,060

 

As of April 2018, VED for cars first registered after 1 April 2017 will not only be based on CO2 emissions but also the vehicle’s value when bought new.

All vehicles, including zero emissions electric cars, with a list price of £40,000 or more will pay a £310 supplement for the first five years. So, for example, a Tesla Model S at £53,500 will be charged £1550 in VED, whereas Nissan Leaf at £21,990 will be exempt.

VED from years 2-6 for vehicles registered after 1 April 2017 with a list price of more than £40,000 is:

Fuel type Annual rate Supplement Total
Petrol/diesel £140 £310 £450
Alternative fuel £130 £310 £440
Electric £0 £310 £310

4. Diesel cars first registered from 1 April 2018

All diesel cars first registered from 1 April 2018 will have to pay additional road tax in the first year, unless they meet the Real Driving Emissions 2 standard for nitrogen oxide emissions (RDE2). Those that meet the RDE2 standard will pay the same in the first year as their petrol counterparts.  

From year two, non-RDE2 compliant diesel cars will pay the same standard annual VED rate of £140 regardless of their CO2 emissions.  

First year road tax for non-RDE2 diesel cars registered on or after 1 April 2018 is:

C02 g/km Non-RDE2 compliant diesel cars
0 £0
1-50 £25
51-75 £105
76-90 £125
91-100 £145
101-110 £165
111-130 £205
131-150 £515
151-170 £830
171-190 £1,240
191-225 £1,760
226-255 £2,070
Over 255 £2,070

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Why are the first year VED rates higher?

Petrol and diesel cars emit CO2 when they burn fuel. These emissions have been widely blamed for global warming and the build-up of greenhouse gases. First year rate increases are the result of inflation rises and a bid by the Government to incentivise motorists to buy less polluting vehicles.

How can I find out which tax band a vehicle falls into?

  • You can find the CO2 emissions of a vehicle in its V5C logbook.
  • If you’re looking to purchase a new or used car and you want to find out which tax band it will fall into before you buy, you can check its CO2 emissions on the Vehicle Certification Agency website.
  • If you’re buying a brand new diesel car, check with the car’s manufacturer to see if it’s RDE2 compliant or not. Remember that you’ll also need to pay the five-year supplement if the list price is more than £40,000, regardless of its CO2 emissions.

What cars are exempt from paying VED?

The following vehicles are still exempt from paying VED:

Just remember, even if your vehicle is exempt and you don’t have to pay anything, you still have to apply for road tax.

If you think road tax is complicated, then at least finding the right car insurance should be easier. Comparing quotes with us takes less than five minutes and could save you money on your premium.  

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