Car tax bands: how much is car tax?

Paul Green, National Remarketing Manager, Wednesday, 13 July 2022
Updated: Monday, 23 October 2023

If you own or drive a car on UK roads, understanding car tax is essential. It’s an often-overlooked expense that drivers must factor into the annual running costs of their vehicles on top of the fuel, insurance, maintenance, and any car finance payments.

In this guide, we explain what car tax is, how it’s calculated, how much vehicle tax you need to pay based on the car you drive, and what can happen if you drive an untaxed vehicle. We’ll also look at drivers and vehicles exempt from paying car tax, along with the government’s plans for updating vehicle tax policies.

Jump to a specific section:

What is car tax?

Car tax, otherwise known as vehicle tax or Vehicle Excise Duty (VED), is the tax for driving your vehicle on public roads in the UK.

The Driver and Vehicle Licensing Agency (DVLA) collects between £5-£6 billion in car tax each year, but not all of this is spent on road improvements and infrastructure. In fact, car tax is grouped in with other forms of tax, meaning the government’s income from road tax is just as likely to be spent on education or healthcare as on roads.

How is car tax calculated?

To calculate vehicle excise duty, the government splits cars into tax bands. It uses several factors to decide where these splits lie, mainly CO2 emissions in g/km.

How much road tax you pay also depends on whether you pay monthly, every 6 months, or by an annual direct debit. Paying monthly will cost you slightly more overall than paying upfront.

Car tax band prices

The car tax band prices listed in the following tables are for petrol, diesel, and alternative fuel cars. Diesel cars tested to Real Driving Emissions 2 (RDE2) standards* fall into the same category as petrol cars (TC48). All other diesel cars tested to RDE standards** sit in a higher tax class (TC49). Alternative fuels are hydrogen fuel cells, liquid petroleum gas (LPG) and condensed natural gas (CNG).

Unless otherwise stated, prices are for single 12-month payments made either by direct debit or non-direct debit. Vehicles with a list price of over £40,000 will pay an increased rate for 5 years from the start of the second licence. This is currently £390 per year on top of the standard rate.

The data used in this article is taken from GOV.UK.

What is a second licence in road tax?

The second licence refers to the second and subsequent years that a vehicle is registered with the DVLA. In the first year of registration, the vehicle’s owner will pay a higher road tax rate, but this will decrease in the years that follow. For vehicles valued at over £40,000, owners will need to pay a surcharge on top of the second licence rate for 5 additional years.

Car tax bands for cars registered on or after 1 April 2023

Cars registered on or after 1 April 2023 with 0 g/km CO2 emissions are exempt from paying road tax, whilst all other vehicles are required to pay the following amount of tax in the first year of registration.

CO2 emissions (g/km) Petrol and diesel cars* Diesel cars** Alternative fuel cars
0 £0 £0 £0
1-50 £10 £30 £0
51-75 £30 £130 £20
76-90 £130 £165 £120
91-100 £165 £185 £155
101-110 £185 £210 £175
111-130 £210 £255 £200
131-150 £255 £645 £245
151-170 £645 £1,040 £635
171-190 £1,040 £1,565 £1,030
191-225 £1,565 £2,220 £1,555
226-255 £2,220 £2,605 £2,595

From the second licence onwards, the standard rate of vehicle tax applies. These rates are shown in the two tables below.

Car tax rates for cars registered after 1 April 2017

In 2017, the government introduced a flat rate for VED to simplify and make things fairer for drivers. Whereas a car’s CO2 emissions had previously determined tax bands, the new system saw all cars being charged the same amount of road tax, regardless of emissions, fuel type and engine size.

Cars registered after 1 April 2017 with 0g/km CO2 emissions are exempt from paying road tax, whilst all other vehicles must pay the following tax amount.

Tax class Non-direct debit (12 months) Non-direct debit (6 months) Direct debit (monthly payments) Direct debit (6 months)
Petrol/diesel car £180 £99 £189 £94.50
Alternative fuel car £170 £93.50 £178.50 £89.25

Vehicles with a list price of over £40,000 will pay an additional rate of £390 for 5 years from the start of the second licence.

Car tax bands for cars registered between 1 March 2001 and 1 April 2017

Cars registered between 1 March 2001 and 1 April 2007 with 0 -100g/km CO2 emissions are exempt from paying road tax, whilst all other vehicles are required to pay the following amount of tax per year.

Tax band CO2 emissions (g/km) Petrol/diesel cars Alternative fuel cars
A Up to 100 £0 £0
B 101-110 £20 £10
C 111-120 £35 £25
D 121-130 £150 £140
E 131-140 £180 £170
F 141-150 £200 £190
G 151-165 £240 £230
H 166-175 £290 £280
I 176-185 £320 £310
J 186-200 £365 £355
K 201-225 £395 £385
L 226-255 £675 £665
M Over 255 £695 £685

How do I find out my car tax band?

To find your vehicle’s tax band, you’ll need to check your V5C logbook and look up the date it was first registered. This is on page 1 of the logbook. When you know your car’s registration date, you can refer to the relevant GOV.UK pricing table to find the correct tax band.

You can also enter your vehicle registration into a third-party site, such as Car Tax Check, for more detailed information about its tax and registration history.

When do you pay car tax?

You can tax a car for a period of 6 or 12 months. If you own a car, you will automatically receive a reminder letter before your tax is due to expire, which is always at the end of a given month. You can pay via a manual transaction or an automatic direct debit. If you tax a vehicle in the middle or at the end of a calendar month, your payment won’t cover the days already elapsed.

What do you need in order to tax a car?

To tax a vehicle, you’ll need the reference number from one of the following documents:

  • A recent vehicle tax reminder letter from the DVLA
  • Your vehicle logbook (V5C), provided it is in your name
  • The green new keeper slip from your vehicle’s logbook if you have just bought it.

You must also have a valid insurance policy and hold a valid MOT certificate if the car is over 3 years old, as it is illegal to drive a car on UK roads without either of these things in place.

You can make your tax payment online via the GOV.UK website or at a Post Office.

How is car tax monitored?

Car tax is monitored by an electronic database maintained by the DVLA. Police and other law enforcement agencies use a network of Automatic Number Plate Recognition (ANPR) cameras to monitor taxed and untaxed vehicles. Before 2014, the tax disc system operated in the UK, where motorists were required to display a paper disc in the car windscreen as proof the car was taxed.

What happens if you don’t pay car tax?

If you don’t pay your car tax, you’ll first be issued a Late Licensing Penalty (LLP) letter carrying an £80 fine. This can be reduced to £40 if you pay within 28 days of the date on the letter. If you fail to pay this penalty, you risk much higher fines, being taken to court and having your vehicle repossessed by a debt collection agency.

Car tax exemptions

The following vehicles are exempt from car tax, though you must still register your vehicle even if you don’t have to pay:

  • Vehicles used by a disabled person (you can claim disability exemption if eligible)
  • Disabled passenger vehicles (apart from ambulances)
  • Mobility scooters and powered wheelchairs (provided they have a maximum speed of 8mph)
  • Historic vehicles (cars first registered more than 40 years before 1 January of the current year)
  • Electric vehicles and zero-emission vehicles (see section below for further details on this)
  • Mowing machines
  • Steam vehicles
  • Vehicles used just for agriculture, horticulture, and forestry.

For any of the above vehicles purchased with car finance, the same rules apply. For more information on exemptions from Vehicle Excise Duty, visit the GOV.UK website.

Changes to car tax for electric cars

Currently, all-electric cars registered in the UK do not have to pay road tax. From 2025, this is changing, and electric vehicle owners (current and future) will no longer be exempt.

New zero-emission cars registered on or after 1 April 2025 must pay £10 a year in VED (the lowest first-year rate, currently applied to vehicles with 1-50g/km of CO2 emissions). From year two onwards, they will move to the standard rate, which is currently £180 per year.

There will also be an expensive car supplement on top of the standard rate for any electric vehicle with a list price of more than £40,000, as is the case with petrol and diesel vehicles.

Zero and low-emission cars first registered between 1 March 2001 and 30 March 2017 will start paying the Band B rate of £20 per year.

You must still tax your electric vehicle to be road-legal, even if you don’t need to pay.

Visit the GOV.UK policy page for more information about these changes to VED for zero-emission cars.

FAQs about car tax bands

When you sell your car, you can have any remaining tax refunded to you. Simply let the DVLA know, and they will process a refund. You are no longer permitted to transfer any remaining tax to the new registered keeper.

No, car tax cannot be transferred from the existing owner to a new owner when the vehicle is sold. Whether you buy a vehicle outright or with a car finance agreement, you’ll need to tax it before you can drive it on the roads. It doesn’t matter if the seller’s tax isn’t due to expire for several months; as soon as someone new becomes the car’s registered keeper, they must tax it themselves.

It’s illegal to drive a car on a public road without road tax. The only exceptions are if your vehicle is exempt (as listed above) or if you are taking your car to a pre-booked MOT test.

Yes, the law states that a registered vehicle being kept or used on public roads must be taxed and insured. If your car is being kept off the road in a garage, on a driveway or on private land, it can be declared as such under a SORN (Statutory Off Road Notification). If you declare your car SORN, it doesn’t need to be taxed. However if you do declare it as SORN you will no longer be able to drive it.

If you register your vehicle as off-the-road with a SORN, you’ll get a refund for the tax you’ve already paid but no longer require.

You can check when your next car tax payment is due by entering your vehicle registration number on the GOV.UK website. You should receive a letter or email notification when your next Vehicle Excise Duty (VED) payment is due.

Alternatively, you can enter your vehicle registration into a third-party site, such as Car Tax Check, to find out your car’s tax band, tax due date, and other information.

Currently, zero-emission vehicles do not pay road tax. Plug-in hybrids do pay but at a low tax rate. These exemptions are to incentivise people to buy an electric car over a petrol or diesel car. Even though electric vehicles have free car tax, drivers must still tax their cars via the government website.

From 1 April 2025, all vehicles, regardless of fuel type and engine size, must pay road tax.

Alternative fuel vehicles are any vehicles that don’t run using either petrol or diesel. Alternative fuel types include hydrogen fuel cells, electricity, liquid petroleum gas (LPG) and compressed natural gas (CNG).

Each tax year, the UK government updates vehicle tax rates in accordance with policy and broader economic changes, such as the rate of inflation. In the 2023-24 tax year, car tax bands shifted quite significantly to incentivise UK drivers to switch to low or zero-emission vehicles, such as electric cars.

This follows changes in 2020 when new emissions-based rates came into effect. The government switched from NEDC (New European Driving Cycle) to WLTP (Worldwide Harmonised Light Vehicle Test Procedure), regarded as a more realistic evaluation of your car’s fuel consumption.

These changes form part of wider government efforts, including the new ultra-low emission zone (ULEZ) in London, to reduce CO2 emissions at a national level. In practice, they mean drivers of petrol and diesel cars, alongside drivers of other high-emission vehicles, will pay more in Vehicle Excise Duty (VED).

Yes, vans are taxed differently from cars. While car tax rates are based mainly on the CO2 emissions g/km generated, van tax bands are based on vehicle weight. Private light goods vehicles pay £200 or £325 per year, depending on engine size, and commercial light goods vehicles pay £320 per year.

Visit the GOV.UK website for more information about tax rates for other vehicles.

If you own or drive a car on UK roads, understanding car tax is essential. It’s an often-overlooked expense that drivers must factor into the annual running costs of their vehicles on top of the fuel, insurance, maintenance, and any car finance payments.

In this guide, we explain what car tax is, how it’s calculated, how much vehicle tax you need to pay based on the car you drive, and what can happen if you drive an untaxed vehicle. We’ll also look at drivers and vehicles exempt from paying car tax, along with the government’s plans for updating vehicle tax policies.

Jump to a specific section:

What is car tax?

Car tax, otherwise known as vehicle tax or Vehicle Excise Duty (VED), is the tax for driving your vehicle on public roads in the UK.

The Driver and Vehicle Licensing Agency (DVLA) collects between £5-£6 billion in car tax each year, but not all of this is spent on road improvements and infrastructure. In fact, car tax is grouped in with other forms of tax, meaning the government’s income from road tax is just as likely to be spent on education or healthcare as on roads.

How is car tax calculated?

To calculate vehicle excise duty, the government splits cars into tax bands. It uses several factors to decide where these splits lie, mainly CO2 emissions in g/km.

How much road tax you pay also depends on whether you pay monthly, every 6 months, or by an annual direct debit. Paying monthly will cost you slightly more overall than paying upfront.

Car tax band prices

The car tax band prices listed in the following tables are for petrol, diesel, and alternative fuel cars. Diesel cars tested to Real Driving Emissions 2 (RDE2) standards* fall into the same category as petrol cars (TC48). All other diesel cars tested to RDE standards** sit in a higher tax class (TC49). Alternative fuels are hydrogen fuel cells, liquid petroleum gas (LPG) and condensed natural gas (CNG).

Unless otherwise stated, prices are for single 12-month payments made either by direct debit or non-direct debit. Vehicles with a list price of over £40,000 will pay an increased rate for 5 years from the start of the second licence. This is currently £390 per year on top of the standard rate.

The data used in this article is taken from GOV.UK.

What is a second licence in road tax?

The second licence refers to the second and subsequent years that a vehicle is registered with the DVLA. In the first year of registration, the vehicle’s owner will pay a higher road tax rate, but this will decrease in the years that follow. For vehicles valued at over £40,000, owners will need to pay a surcharge on top of the second licence rate for 5 additional years.

Car tax bands for cars registered on or after 1 April 2023

Cars registered on or after 1 April 2023 with 0 g/km CO2 emissions are exempt from paying road tax, whilst all other vehicles are required to pay the following amount of tax in the first year of registration.

CO2 emissions (g/km) Petrol and diesel cars* Diesel cars** Alt. fuel cars
0 £0 £0 £0
1-50 £10 £30 £0
51-75 £30 £130 £20
76-90 £130 £165 £120
91-100 £165 £185 £155
101-110 £185 £210 £175
111-130 £210 £255 £200
131-150 £255 £645 £245
151-170 £645 £1,040 £635
171-190 £1,040 £1,565 £1,030
191-225 £1,565 £2,220 £1,555
226-255 £2,220 £2,605 £2,595

From the second licence onwards, the standard rate of vehicle tax applies. These rates are shown in the two tables below.

Car tax rates for cars registered after 1 April 2017

In 2017, the government introduced a flat rate for VED to simplify and make things fairer for drivers. Whereas a car’s CO2 emissions had previously determined tax bands, the new system saw all cars being charged the same amount of road tax, regardless of emissions, fuel type and engine size.

Cars registered after 1 April 2017 with 0g/km CO2 emissions are exempt from paying road tax, whilst all other vehicles must pay the following tax amount.

Tax class Non-direct debit (12 months) Non-direct debit (6 months) Direct debit (monthly payments) Direct debit (6 months)
Petrol/diesel car £180 £99 £189 £94.50
Alternative fuel car £170 £93.50 £178.50 £89.25

Vehicles with a list price of over £40,000 will pay an additional rate of £390 for 5 years from the start of the second licence.

Car tax bands for cars registered between 1 March 2001 and 1 April 2017

Cars registered between 1 March 2001 and 1 April 2007 with 0 -100g/km CO2 emissions are exempt from paying road tax, whilst all other vehicles are required to pay the following amount of tax per year.

Tax band CO2 emissions (g/km) Petrol and diesel cars Alt. fuel cars
A Up to 100 £0 £0
B 101-110 £20 £10
C 111-120 £35 £25
D 121-130 £150 £140
E 131-140 £180 £170
F 141-150 £200 £190
G 151-165 £240 £230
H 166-175 £290 £280
I 176-185 £320 £310
J 186-200 £365 £355
K 201-225 £395 £385
L 226-255 £675 £665
M Over 255 £695 £685

How do I find out my car tax band?

To find your vehicle’s tax band, you’ll need to check your V5C logbook and look up the date it was first registered. This is on page 1 of the logbook. When you know your car’s registration date, you can refer to the relevant GOV.UK pricing table to find the correct tax band.

You can also enter your vehicle registration into a third-party site, such as Car Tax Check, for more detailed information about its tax and registration history.

When do you pay car tax?

You can tax a car for a period of 6 or 12 months. If you own a car, you will automatically receive a reminder letter before your tax is due to expire, which is always at the end of a given month. You can pay via a manual transaction or an automatic direct debit. If you tax a vehicle in the middle or at the end of a calendar month, your payment won’t cover the days already elapsed.

What do you need in order to tax a car?

To tax a vehicle, you’ll need the reference number from one of the following documents:

  • A recent vehicle tax reminder letter from the DVLA
  • Your vehicle logbook (V5C), provided it is in your name
  • The green new keeper slip from your vehicle’s logbook if you have just bought it.

You must also have a valid insurance policy and hold a valid MOT certificate if the car is over 3 years old, as it is illegal to drive a car on UK roads without either of these things in place.

You can make your tax payment online via the GOV.UK website or at a Post Office.

How is car tax monitored?

Car tax is monitored by an electronic database maintained by the DVLA. Police and other law enforcement agencies use a network of Automatic Number Plate Recognition (ANPR) cameras to monitor taxed and untaxed vehicles. Before 2014, the tax disc system operated in the UK, where motorists were required to display a paper disc in the car windscreen as proof the car was taxed.

What happens if you don’t pay car tax?

If you don’t pay your car tax, you’ll first be issued a Late Licensing Penalty (LLP) letter carrying an £80 fine. This can be reduced to £40 if you pay within 28 days of the date on the letter. If you fail to pay this penalty, you risk much higher fines, being taken to court and having your vehicle repossessed by a debt collection agency.

Car tax exemptions

The following vehicles are exempt from car tax, though you must still register your vehicle even if you don’t have to pay:

  • Vehicles used by a disabled person (you can claim disability exemption if eligible)
  • Disabled passenger vehicles (apart from ambulances)
  • Mobility scooters and powered wheelchairs (provided they have a maximum speed of 8mph)
  • Historic vehicles (cars first registered more than 40 years before 1 January of the current year)
  • Electric vehicles and zero-emission vehicles (see section below for further details on this)
  • Mowing machines
  • Steam vehicles
  • Vehicles used just for agriculture, horticulture, and forestry.

For any of the above vehicles purchased with car finance, the same rules apply. For more information on exemptions from Vehicle Excise Duty, visit the GOV.UK website.

Changes to car tax for electric cars

Currently, all-electric cars registered in the UK do not have to pay road tax. From 2025, this is changing, and electric vehicle owners (current and future) will no longer be exempt.

New zero-emission cars registered on or after 1 April 2025 must pay £10 a year in VED (the lowest first-year rate, currently applied to vehicles with 1-50g/km of CO2 emissions). From year two onwards, they will move to the standard rate, which is currently £180 per year.

There will also be an expensive car supplement on top of the standard rate for any electric vehicle with a list price of more than £40,000, as is the case with petrol and diesel vehicles.

Zero and low-emission cars first registered between 1 March 2001 and 30 March 2017 will start paying the Band B rate of £20 per year.

You must still tax your electric vehicle to be road-legal, even if you don’t need to pay.

Visit the GOV.UK policy page for more information about these changes to VED for zero-emission cars.

FAQs about car tax bands

When you sell your car, you can have any remaining tax refunded to you. Simply let the DVLA know, and they will process a refund. You are no longer permitted to transfer any remaining tax to the new registered keeper.

No, car tax cannot be transferred from the existing owner to a new owner when the vehicle is sold. Whether you buy a vehicle outright or with a car finance agreement, you’ll need to tax it before you can drive it on the roads. It doesn’t matter if the seller’s tax isn’t due to expire for several months; as soon as someone new becomes the car’s registered keeper, they must tax it themselves.

It’s illegal to drive a car on a public road without road tax. The only exceptions are if your vehicle is exempt (as listed above) or if you are taking your car to a pre-booked MOT test.

Yes, the law states that a registered vehicle being kept or used on public roads must be taxed and insured. If your car is being kept off the road in a garage, on a driveway or on private land, it can be declared as such under a SORN (Statutory Off Road Notification). If you declare your car SORN, it doesn’t need to be taxed. However if you do declare it as SORN you will no longer be able to drive it.

If you register your vehicle as off-the-road with a SORN, you’ll get a refund for the tax you’ve already paid but no longer require.

You can check when your next car tax payment is due by entering your vehicle registration number on the GOV.UK website. You should receive a letter or email notification when your next Vehicle Excise Duty (VED) payment is due.

Alternatively, you can enter your vehicle registration into a third-party site, such as Car Tax Check, to find out your car’s tax band, tax due date, and other information.

Currently, zero-emission vehicles do not pay road tax. Plug-in hybrids do pay but at a low tax rate. These exemptions are to incentivise people to buy an electric car over a petrol or diesel car. Even though electric vehicles have free car tax, drivers must still tax their cars via the government website.

From 1 April 2025, all vehicles, regardless of fuel type and engine size, must pay road tax.

Alternative fuel vehicles are any vehicles that don’t run using either petrol or diesel. Alternative fuel types include hydrogen fuel cells, electricity, liquid petroleum gas (LPG) and compressed natural gas (CNG).

Each tax year, the UK government updates vehicle tax rates in accordance with policy and broader economic changes, such as the rate of inflation. In the 2023-24 tax year, car tax bands shifted quite significantly to incentivise UK drivers to switch to low or zero-emission vehicles, such as electric cars.

This follows changes in 2020 when new emissions-based rates came into effect. The government switched from NEDC (New European Driving Cycle) to WLTP (Worldwide Harmonised Light Vehicle Test Procedure), regarded as a more realistic evaluation of your car’s fuel consumption.

These changes form part of wider government efforts, including the new ultra-low emission zone (ULEZ) in London, to reduce CO2 emissions at a national level. In practice, they mean drivers of petrol and diesel cars, alongside drivers of other high-emission vehicles, will pay more in Vehicle Excise Duty (VED).

Yes, vans are taxed differently from cars. While car tax rates are based mainly on the CO2 emissions g/km generated, van tax bands are based on vehicle weight. Private light goods vehicles pay £200 or £325 per year, depending on engine size, and commercial light goods vehicles pay £320 per year.

Visit the GOV.UK website for more information about tax rates for other vehicles.

 
Paul Green, National Remarketing Manager
Bringing you tips on buying and maintaining your vehicle to make life on the road less stressful.
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