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Understand your car tax

Not sure how much road tax you need to pay? Read our guide to understand what road tax band your car is in and how an increase in VED rates in April 2023 will affect how much road tax you’ll need to pay.

Not sure how much road tax you need to pay? Read our guide to understand what road tax band your car is in and how an increase in VED rates in April 2023 will affect how much road tax you’ll need to pay.

Written by
Julie Daniels
Motor insurance comparison expert
Reviewed by
Kate Hughes
Insurance expert
Last Updated
25 APRIL 2023
8 min read
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What is car road tax?

Car road tax, officially known as Vehicle Excise Duty (VED), is a tax charged on nearly all cars that are driven or kept on public roads. The tax is overseen and collected by the Driver and Vehicle Licensing Agency (DVLA).

How is VED calculated?

The amount of tax you’ll pay depends on when your car was registered for the first time (not when you became the owner if you bought a used car).

That’s because although the rules for calculating VED changed substantially in April 2017, they were not backdated. That means older cars only need to comply with the tax system that was in place when they were registered.

Cars and light vehicles registered What VED rates are based on
Before 1 March 2001 VED is based on engine size. You’ll pay one of two rates depending on whether your engine is under or over 1549cc.
Between 1 March 2001 and 31 March 2017 VED is based on the CO2 emissions and the fuel type of the car
On or after 1 April 2017 In the first year after you register the vehicle, VED is based on your car’s fuel type and CO2 emissions.
From the second year, VED is a standard yearly rate based on the car’s fuel type.

CO2 emissions are measured in the number of grams released into the atmosphere per kilometre (g/km). You can find out how much your car emits on its V5C registration certificate in your logbook, or on the Vehicle Certification Agency.

How much will I pay for car road tax as of April 2023? 

Depending on its first registration date, your car will now fall into one of three VED tax bands, each with its own rules and calculations: 

1. Cars first registered before 1 March 2001 

  • The VED rate you’ll pay is based solely on your engine size, regardless of fuel type or CO2 emissions.
  • With increases to VED rates in April 2023, you’ll now pay £200 per year for cars with an engine size of 1549cc or below, and £325 per year for cars with an engine size over 1549cc.
  • These rates also apply for light good vehicles such as vans that were first registered before the 1 March 2001 cut-off. 

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

  • Your car will be put into one of 13 tax bands depending on its CO2 emissions. The bands are lettered from A (less than 100 g/km) to M (over 255 g/km)
  • The higher your car’s CO2 emissions, the more VED you’ll have to pay. If your car is in band A, you won’t have to pay anything. If it’s in band M, you’ll pay £685 in annual road tax for a petrol or diesel car.
  • You’ll pay £10 less per year for an alternative fuel car in the same CO2 emissions bracket as a petrol or diesel car if you make a single annual payment. Alternative fuel cars include hybrids and cars that run on bioethanol or liquid petroleum gas. See rates (including six-month rates) for alternative fuel cars registered between 1 March 2001 and 31 March 2017 on GOV.UK

VED rates for petrol and diesel cars
(registered between 1 March 2001 and 31 March 2017)

Band and CO2 emission Single 12-month payment  Single 12 - month payment by direct debit Total of 12 monthly instalments by direct debit Single 6-month payment  Single 6-month payment by direct debit
A: Up to 100g/km £0 £0 N/A N/A N/A
B: 101 to 110g/km £20 £20 £21 N/A N/A
C: 111 to 120g/km £35 £35 £36.75 N/A N/A
D: 121 to 130g/km £150 £150 £157.50 £82.50 £78.75
E: 131 to 140g/km £180 £180 £189 £99 £94.59
F: 141 to 150g/km £200 £200 £210 £110 £105
G: 151 to 165g/km £240 £240 £252 £132 £126
H: 166 to 175g/km £290 £290 £304.50 £159.50 £152.25
I: 176 to 185g/km £320 £320 £336 £176 £168
J: 186 to 200g/km £365 £365 £383.25 £200.75 £191.63
K*: 201 to 225g/km £395 £395 £414.75 £217.25 £207.38
L: 226 to 255g/km £675 £675 £708.75 £371.25 £354.38
M: Over 255g/km £695 £695 £729.75 £382.25 £364.88

*Includes cars with a CO2 figure over 225g/km but were registered before 23 March 2006.

3. Cars first registered from 1 April 2017 

  • For cars first registered on or after 1 April 2017, buyers will pay a first-year rate based on the car’s CO2 emissions, ranging from £0 for zero emission cars, and up to £2,605 for the biggest polluters.
  • Low emission cars (hybrids, bioethanol and liquid petroleum gas) will pay £10 less than petrol and diesel cars in the first year for a car in the same CO2 emissions bracket.
  • Owners of new diesel cars that do not comply with the RDE2 emissions standard will have to pay a higher rate of VED in the first year, so it’s a good idea to check before you buy.
  • From the second year, car owners will pay a standard annual rate based on the fuel type of their car. As of April 2023, petrol and diesel cars will be charged £180, while alternative fuel cars will pay £170.
  • Fully electric cars are exempt from paying road tax, although owners will still need to apply.
  • New cars that cost over £40,000 will also be charged an additional £390 on top of the standard rate for five years from the second time the vehicle is taxed. The £40,000 limit is based on the published list price, so you’ll need to pay this surcharge even if you buy your vehicle at a discounted price. Zero emission vehicles over £40,000 are exempt from this surcharge.

First year VED rates for petrol, diesel and alternative fuel cars as of April 2023.

CO2 emissions Diesel cars that meet the RDE2 standard and petrol cars All other diesel cars (TC49) Alternative fuel cars
0g/km £0 £0 £0
1 to 50g/km £10 £30 £0
51 to 75g/km £30 £130 £20
76 to 90g/km £130 £165 £120
91 tot 100g/km £165 £185 £155
101 to 110g/km £185 £210 £175
111 to 130g/km £210 £255 £200
131 to 150g/km £255 £645 £245
151 to 170g/km £645 £1,040 £635
171 to 190g/km £1,040 £1,565 £1,030
191 to 225g/km £1,565 £2,220 £1,555
226 to 255g/km £2,220 £2,605 £2,210
Over 255g/km £2,605 £2,605 £2,595

Rates for second tax payment onwards

Fuel type  Single 12-month payment Single 12-month payment by Direct Debit Total of 12 monthly payments by Direct Debit Singe 6-month payment Single 6-month payment by Direct Debit
Petrol or diesel £180 £180 £189 £99 £94.50
Electric £0 N/A N/A £0 N/A
Alternative fuel - includes hybrids, bioethanol and liquid petroleum gas £170 £170 £178.50 £93.50 £89.25

Please note: you’ll pay more VED over the year if you pay biannually or monthly.

Which vehicles are exempt from VED?

The following types of vehicle are exempt from VED, although you still need to apply for VED even if you don’t need to pay anything:

  • Electric vehicles – to be exempt, the electricity that powers your electric car must come from an external source or an electric storage battery not connected to any source of power when the vehicle is moving.
  • Disability vehicles – if you have a disability, you may be exempt from paying VED, although you’ll still have to apply for it. You can also get a reduction in the VED if you are entitled to certain benefits. Find out if you’re eligible for VED tax exemption on the GOV.UK website. You do not need to pay road tax on
  • 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.
  • SORN vehicles – if you’ve declared your car off the road and have a Statutory Off Road Notice (SORN), you won’t need to tax or insure your car, and you may be due a car tax refund. Just make sure your car is kept on private land or in a garage and is not driven or parked on a public road.
  • Vehicles used for agriculture, horticulture and forestry including mowers, tractors and agricultural vehicles that are used off-road on private land.

When is the VED exemption for electric cars ending?

The exemption for electric vehicles is set to end in 2025. As more people opt for electric cars, the government is reducing the incentive to buy one. It now wants to bring the taxation of electric cars into line with petrol and diesel.

Zero emission cars first registered on or after 1 April 2017 will continue to be liable for the lowest first year rate of VED, which currently applies to vehicles with CO2 emissions of 1 to 50g/km. But from the second year of registration onwards, zero emission cars will move to the standard annual rate.

How do I pay VED?

You can pay VED online or at the Post Office. You’ll need a reference number from either:

  • A recent reminder (V11) from the DVLA
  • Your vehicle logbook (V5C)
  • The green ‘new keeper’s slip (V5C/2) from the logbook if you’ve just bought the car.

If you’re paying at the Post Office, you’ll also need to show a valid MOT certificate if your car has been registered for three years or more.

How can I keep my car costs down?

If you’re in the market for a new car, you could save on your road tax by opting for one with lower CO2 emissions. Otherwise, while you may not be able to control the cost of VED or other car running costs, there are practical ways to reduce the cost of your car insurance.

Frequently asked questions

Did VED rates rise in April 2023?

Yes, VED rates for cars, motorcycles and vans rose in April 2023 in line with the Retail Prices Index (RPI). To support the haulage sector, VED for HGVs was frozen for 2023-24.

How is VED calculated for motorcycles?

VED or road tax for motorcycles is calculated according to engine size only: 

Motorcycle (with or without sidecar)

Engine (cc) Single 12-month payment Single 12-month payment by direct debit Total of 12 monthly instalments by direct debit Single 6-month payment 6 months by direct debit
Not over 150 £24 £24 £22.50 N/A N/A
151-400 £52 £52 £54.60 £28.60 £27.30
401-600 £80 £80 £84 £44 £42
Over 600 £111 £111 £116.55 £61.05 £58.28

New to two-wheeling? Get all the information you need to get on the road with our guide for new bikers.

How is VED calculated for vans?

Road tax for vans registered on or after 1 March 2001 is calculated based on when the van was first registered and how it complies with Euro Emissions Standards. Vans and other light goods vehicles registered before 1 March 2001 fall under the same tax system as cars first registered in that time, with a standard annual rate charged depending on engine size. 

For more details on VED for vans and what classifies as a van for road tax purposes, read our guide to taxing a van.

How can I check if my car is taxed?

You can find out whether a vehicle has up-to-date tax or has been registered as off the road (SORN) on GOV.UK. You’ll just need your registration number. It can take up to five working days for the records to update.

You can also use the same service to find the current tax rates for your vehicle. You'll need the 11-digit reference number from your V5C registration certificate to do this.

What happens to your road tax when you sell your car?

When you sell your car, you can get a tax refund for any full months of remaining road tax you’ve paid for that vehicle. The road tax you’ve paid isn’t transferable.

The new owner will have to pay road tax on their new car before they can drive it. You should tell the DVLA straight away when you sell your car, and they can automatically arrange for your refund. You can also get a refund for full months if you scrap your car at an authorised site or it’s written off by an insurance company.

What happens if I don’t tax my car?

The DVLA will automatically send you a reminder when your car road tax is due. If you fail to pay on time, they will send you a fixed penalty notice of £80. This fine will be reduced to £40 if you pay your bill within 33 days. If you’re not using your car and you don’t want to pay tax or insurance, you’ll need to officially declare your car as off the road

If you’re caught driving an untaxed car, you’ll be fined £30, plus one and half times the amount of outstanding road tax to be paid. If you fail to pay that fine you can be taken to court and fined either £1,000 or five time the amount you owe in tax, whichever is greater.

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Julie Daniels - motor insurance comparison expert

Julie is passionate about delivering a great customer experience and rewarding people for saving on their insurance through our loyalty and rewards programme. She’s spoken to the media, including outlets like Sky News and Capital FM, about car and home insurance, as well as our rewards scheme.

Learn more about Julie

Kate Hughes - Insurance and finance expert

As an award-winning journalist, author and broadcast commentator, Kate has been writing about personal finance for more than 20 years. She’s the former Money Editor for The Independent. Her work has appeared across the UK broadsheets as well as a number of international titles. Kate brings her financial expertise to inform her readers on ways to save money. She’s also written a book. ‘Going Zero: One Family’s Journey to Zero Waste and a Greener Lifestyle’ is available now.

Learn more about Kate

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