Car tax explained

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 from when they’re first registered. This is based on their CO2 emissions to encourage drivers to choose more environmentally friendly vehicles.

However, from April 2025, new and existing electric cars, vans and motorcycles will begin to pay VED in the same way as petrol and diesel vehicles.

The aim of this is to make sure all road users pay a fair tax contribution as the take-up of electric vehicles continues to accelerate.

Depending on how you pay it, your car tax will need to be renewed every six to 12 months.

How is car tax calculated?

How car tax is worked out depends on when your vehicle was first registered.

• For vehicles registered on or after 1 April 2017, road tax is based on CO2 emissions and price. A different first-year new car rate is paid for the first year of a car’s lifecycle at the point of registration.

• For vehicles registered between 2001 and 2017, road tax is based on CO2 emissions only.

• For vehicles registered before 2001, the car tax rate is based on engine capacity (cc) alone.

How is car tax monitored?

The DVLA holds information about car tax on a national database.

The police monitor the car tax status of vehicles by using a network of Automatic Number Plate Recognition (ANPR) cameras. These cameras are located on the roadside or inside police vehicles.

ANPR cameras are linked to the DVLA database so that checks can be made quickly.

Why do I have to pay car tax?

The revenue from VED helps to fund essential areas of government spending that should benefit everyone.

The DVLA Annual Report 2023/2024 recorded more than £7.8 billion in VED revenue. This money, together with other forms of tax, is used for road improvements and infrastructure, and in other areas such as health and education.

What are the current UK car tax bands?

Since April 2018, cars have fallen into different road tax categories, depending on when they were first registered as a brand-new vehicle. If you opt to pay in instalments, it will also cost you a little more.

The current tax band rates are as follows:

Cars first registered from 1 April 2017

Petrol cars, and diesel cars that meet certain emission standards, first registered on or after 1 April 2017 pay a first-year rate based on the vehicle’s CO2 emissions. This is shown in the table. They then pay a standard annual rate of £190 (2024-25)/£195 (2025-26) from year two onwards.

First-year payments

First-year VED rates - Tax year April 2024-2025

First-year VED rates - Tax year April 2025-2026

All diesel cars first registered from 1 April 2018 have to pay additional road tax in the first year, unless they meet the Real Driving Emissions 2 standard for nitrogen oxide emissions (RDE2). You can ask your car’s manufacturer if your car meets the RDE2 standard.

New diesel vehicles registered after 1 April 2018 that don’t meet RDE2 will be charged a supplement on their first-year rate to the effect of moving up by one VED band.

Standard VED rates

Standard rates for second tax payment onwards (For cars registered after 2017 under £40,000 list price)

Rates for second tax payment for years two to six for expensive cars (For cars registered after 2017 with a list price of £40,000+ - total including the additional rate)

¹ _{If you pay in six-monthly or monthly instalments by direct debit you may have to pay more.}

Expensive cars

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

Vehicles with a list price of £40,000 or more have to pay a supplement for the first five years. This is currently £410 from the second time the vehicle is taxed and will rise to £425 in April 2025. Owners of zero-emission electric vehicles over £40,000 currently don’t have to pay this supplement but will after April 2025.

It’s the value of the vehicle when bought new that counts. So, if you buy a car second-hand that’s under six years old for less than £40,000 but its original list price was more than £40,000, you’ll have to pay the additional VED.

Alternative fuel vehicles (AFVs) currently pay £10 less in the first year, then a standard annual rate of £180 from year two onwards. Alternative fuelled vehicles include hybrids, bioethanol and liquid petroleum gas (LPG) cars.

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 (more than 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 £735 for a single 12-month payment.

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 £415 even if they emit more than 225 g/km of CO2 for a 12-month annual payment.

Petrol and diesel cars

²_{If you pay six-monthly or in monthly instalments by direct debit you may have to pay more.}

³_{Band K includes cars with a CO2 figure over 225g/km but registered before 23 March 2006.}

You can check what car tax band your vehicle falls into by looking at CO2 emission details shown on the car’s V5C registration certificate. Or you can find your vehicle's emission details on GOV.UK. You’ll need to know when your car was first registered and the exact model.

3. Cars first registered before 1 March 2001

These older cars (private vehicles or light goods vehicles) will be charged a standard VED rate based on the size of their engine, how the payment is made and whether it’s for six or 12 months:

Changes to VED from April 2025

From April 2025, Vehicle Excise Duty rates go up and will apply to vehicles that were previously exempt. Here’s a breakdown of all the changes from April 2025.

Changes to VED for electric cars from April 2025

From April 2025, electric cars, vans and motorcycles will begin to pay VED in the same way as petrol and diesel vehicles. This means:

• New zero-emission cars registered on or after 1 April 2025 will need to pay the lowest first year rate of VED (which applies to vehicles with CO2 emissions 1 to 50g/km) – currently £10 a year.

• From the second year of registration onwards, newly registered cars will move to the standard rate – £195 a year from April 2025.

• Zero-emission cars first registered between 1 April 2017 and 31 March 2025 will start paying the standard rate.

• New zero-emission cars with a list price of more than £40,000 registered on or after 1 April 2025 will be liable for the Expensive Car Supplement for five years. EVs had previously been exempt.

• Zero and low-emission cars first registered between 1 March 2001 and 30 March 2017 currently in Band A will start paying a charge of £20.

Changes to VED hybrid and alternatively fuelled vehicles (AFVs) from April 2025

The £10 annual discount for hybrid and AFVs will be removed, and the rate you will pay will depend on when the vehicle was first registered:

• Vehicles registered before 1 April 2017 – the rate will depend on the vehicle’s CO2 emissions (check the current rates for these vehicles)

• Vehicles registered on or after 1 April 2017 – you will pay the standard rate (this will be £195).

VED rates for motorbikes from April 2025

From April 2025 zero-emission motorcycles and tricycles will no longer be exempt from VED and will move to the rate for the smallest engine size.

Vehicle Excise Duty bands and rates for motorcycles

Vehicle Excise Duty bands and rates for motor tricycles

VED rates for vans from April 2025

From April 2025 zero-emission vans will move to the rate for petrol and diesel light goods vehicles.

Vehicle Excise Duty bands and rates for vans registered on or after 1 March 2001

Vehicle Excise Duty bands and rates for vans registered before 1 March 2001

Which tax band is my car by reg?

You can use your registration number to check which car tax band your car is in, using the government’s Vehicle Enquiry Service. You’ll need the latest 11 digit reference number from the V5C registration certificate (logbook).

The Vehicle Certification Agency will help you find the tax rate for either a new or used car, but you’ll need to know the CO2 emissions from the log book. If the car is a Plug-In Hybrid Electric Vehicle (PHEV), you’ll need the WLTP ‘Weighted’ CO2 figure. For any other type of car, you’ll need the WLTP CO2 figure.

If you’re buying a used or new car, the previous owner or the dealer should also be able to help you.

What cars are exempt from paying VED?

Vehicles exempt from paying VED include:

• Zero-emission electric cars until 1 April 2025

• Agricultural vehicles, such as tractors

• Disabled vehicles, if the registered disabled person is eligible for vehicle tax exemption

• Disabled passenger vehicles used by organisations providing transport for disabled people

• Classic vehicles – if your vehicle is more than 40 years old, it will be considered a classic car and will be exempt from paying VED

• Vehicles that have been taken off the road and have a Statutory Off Road Notification (SORN).

Just remember, even if your vehicle is exempt and you don’t have to pay anything, you still have to apply for road tax and, where necessary, claim an exemption from paying. For more details see the rules on VED exemptions on GOV.UK.

Who is exempt from paying VED?

You can apply for exemption from paying vehicle tax if you get the:

• Higher rate mobility component of Disability Living Allowance (DLA)

• Enhanced rate mobility component of Personal Independence Payment (PIP)

• Enhanced rate mobility component of Adult Disability Payment (ADP)

• Higher rate mobility component of Child Disability Payment

• War Pensioners’ Mobility Supplement

• Armed Forces Independence Payment.

The vehicle must be registered in the disabled person’s name or their nominated driver’s name. It can only be used for the disabled person’s personal needs. It can’t be used by the nominated driver for their own personal use.

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