Understand the changes to your car tax band with our guide

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Frequently thought questions

Working out your car tax is a head scratching exercise, it can leave you with lots of questions in your head that you don’t want to ask out loud – because as a driver you should know the answer. Plus, the rules are changing which makes it doubly confusing – but never fear, here are the answers to some ‘frequently thought questions’.

What is car road tax?

Car tax, road tax – whatever you want to call it, its actual official name is ‘Vehicle Excise Duty’ (VED for short). VED is charged on pretty much all cars that are driven or kept on public roads and it’ll cost you between nothing at all to more than £1,000 depending on the car you have.

How is it calculated?

At the moment, how much VED you pay depends on how old your car is. If your car was registered before 1 March 2001 then VED is based on the size of your car’s engine.

If your car was registered on or after 1 March 2001 then it will be put into one of 13 tax bands and which band your car’s in depends on its CO2 emissions (this is what contributes to climate change). Emissions are measured in grams released per kilometre, shown as g/km and you can find out what your car’s emitting from its logbook. The band your car is in will determine how much VED you pay. At the moment, cars with low emissions don’t pay any VED; you can check out the costs per band at Gov.UK, vehicle tax rate tables

What are these new changes from April 2017?

Just to keep you on your toes, VED is changing in April 2017. So, instead of the 13 tax bands that we currently have, there’ll be a first-year rate based on the CO2 emissions of your car with subsequent years subject to a flat rate of £140. Only cars with zero emissions will pay nothing.

If you’ve got a car with a list price of £40,000 or more then you’ll also pay a £310 supplemental on top of the standard rate of £140 – so warn the bank manager.

If you drive an alternative fuel car such as a hybrid or LPG car, then you’ll pay £10 less depending on your emissions for the first year only. So, for anyone that’s curious, here’s a look at what those new charges will be for cars registered from April 2017:

Emissions g/km

First year rate

Standard rate

0

£0

£0

1-50

£10

£140

51-75

£25

£140

76-90

£100

£140

91-100

£120

£140

101-110

£140

£140

111-130

£160

£140

131-150

£200

£140

151-190

£500

£140

191-225

£800

£140

226-255

£1,700

£140

Over 255

£2,000

£140

What vehicles are exempt?

Being exempt from any sort of tax makes you feel good inside, so find out whether you’ll be left with a warm fuzzy feeling or if you’ll have to open your wallet for the taxman instead:

How do I pay for it? 

You can pay for VED the old-fashioned way and go into a Post Office, if you do, you’ll need (where applicable) a valid MOT as well as a reduced pollution certificate and a certificate of insurance.

Of course, you can sort out your VED in the comfort of your front room and do it all online. You can also spread the cost by paying for it monthly, but be aware that you’ll pay a bit more for the privilege.

Why should I comparethemarket.com?

No-one said owning a car was cheap – it’s not just VED you have to think about, you’ll also need to spare a few thoughts when it comes to fuel, repairs and of course, insurance. But while you can’t control things like the cost of car tax, you could influence the cost of your car insurance. And to do that – you need a really good comparison tool, so it’s handy that you’re on one of the UK’s largest comparison sites (what luck). Search with us at comparethemarket.com and you can be more than just a little bit confident about being able to get a good deal – so, let’s start comparing then.

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