Vehicle Excise Duty (VED), commonly known as road tax or car tax, is an annual tax on vehicles used or kept on public roads. This guide explains the current tax system and helps you understand what you'll pay.
How Vehicle Tax Works
The amount you pay depends on when your vehicle was first registered:
- Registered 1 April 2017 onwards: New CO2-based system (covered in this guide)
- Registered 1 March 2001 - 31 March 2017: Based on CO2 emissions bands (A-M)
- Registered before 1 March 2001: Based on engine size
First-Year Rates (2025/26)
For cars registered on or after 1 April 2017, first-year rates are based on CO2 emissions:
| CO2 (g/km) | Petrol/Diesel | Alternative Fuel |
|---|---|---|
| 0 | £0 | £0 |
| 1-50 | £10 | £0 |
| 51-75 | £30 | £20 |
| 76-90 | £135 | £125 |
| 91-100 | £175 | £165 |
| 101-110 | £195 | £185 |
| 111-130 | £220 | £210 |
| 131-150 | £270 | £260 |
| 151-170 | £680 | £670 |
| 171-190 | £1,095 | £1,085 |
| 191-225 | £1,650 | £1,640 |
| 226-255 | £2,340 | £2,330 |
| Over 255 | £2,745 | £2,735 |
Standard Rates (Year 2 Onwards)
After the first year, most vehicles pay a flat rate:
| Vehicle Type | Annual Rate |
|---|---|
| Electric (0 CO2) | £0* |
| Alternative fuel (hybrid, etc.) | £180 |
| Petrol or diesel | £190 |
*Electric vehicles will pay £190 from April 2025
Expensive Car Supplement
Cars with a list price over £40,000 when new pay an additional £410 per year for 5 years (years 2-6 of ownership):
Example: Expensive Petrol Car
Car: BMW 5 Series, list price £45,000
Year 1: First-year rate based on emissions (e.g., £270)
Years 2-6: £190 + £410 = £600/year
Year 7 onwards: £190/year
Example: Expensive Electric Car
Car: Tesla Model S, list price £85,000
Year 1: £0 (electric)
Years 2-6 (until April 2025): £0 + £410 = £410/year
Years 2-6 (from April 2025): £190 + £410 = £600/year
Cars Registered March 2001 - March 2017
Older cars use a different banding system (A-M) based on CO2 emissions:
| Band | CO2 (g/km) | Annual Rate |
|---|---|---|
| A | Up to 100 | £0 |
| B | 101-110 | £20 |
| C | 111-120 | £35 |
| D | 121-130 | £160 |
| E | 131-140 | £190 |
| F | 141-150 | £210 |
| G | 151-165 | £255 |
| H | 166-175 | £305 |
| I | 176-185 | £355 |
| J | 186-200 | £420 |
| K | 201-225 | £695 |
| L | 226-255 | £735 |
| M | Over 255 | £785 |
Payment Options
You can pay vehicle tax:
- Annually: Full amount upfront
- Six-monthly: Slightly more (5% surcharge)
- Monthly by Direct Debit: 5% surcharge, but spread over 12 payments
Payment Comparison (£190 Annual Rate)
Annual: £190 (best value)
Six-monthly: 2 × £104.50 = £209
Monthly: 12 × £16.63 = £199.56
Exempt Vehicles
Some vehicles are exempt from vehicle tax:
- Vehicles used by disabled people (certain criteria)
- Historic vehicles (registered before 1 January 1984)
- Electric vehicles (until April 2025)
- Vehicles used for agriculture, horticulture, forestry
- MOT failure - SORN declared
SORN (Statutory Off Road Notification)
If your vehicle is off the road (not driven or parked on public roads), you can declare a SORN to stop paying tax:
- Remains valid until you tax the vehicle or sell it
- Vehicle must be kept on private land
- No MOT required while SORN is active
- Insurance is optional (but recommended)
Checking Your Vehicle Tax
Check if a vehicle is taxed using the DVLA's free service:
- Go to GOV.UK vehicle enquiry
- Enter the registration number
- View tax and MOT status
Company Car Tax (BIK)
If you have a company car, you pay Benefit in Kind (BIK) tax based on:
- Car's P11D value (list price including options)
- CO2 emissions (percentage rate)
- Your income tax rate
Electric vehicles currently have very low BIK rates (2% in 2025/26), making them tax-efficient for company car drivers.