Car tax changes in 2023: What do I need to know?
Owners of cars with the highest emissions get the biggest hikes in road tax, but electric cars still benefit from a zero rate of VED...
Vehicle excise duty (VED) on all but the cleanest new and used cars rises from 1 April. The increases are generally calculated in line with inflation based on the Retail Price Index (RPI).
For most drivers of new and older cars, the annual cost will go up by between £5 and £15, but drivers of new vehicles with the highest emissions will pay £240 more in the first year. The first-year rate of car tax is based on the car's CO2 emissions, and from 1 April 2023 only pure electric vehicles will continue to be exempt from VED.
The additional 'expensive car' VED for new cars costing more than £40,000 still applies to all cars except pure electric models; plug-in hybrids are not exempt from it. Anyone buying a new car costing more than that from 1 April will have to pay £390 a year for years two to six (a total of £1950) on top of the standard rate of VED for the vehicle.
After the first year, all petrol and diesel cars first registered after 1 April 2017 attract a flat rate of £180, while hybrid owners will pay £170 a year.
First-year car tax rates for new cars from 1 April 2023
| CO2 emissions | First-year VED rate |
|---|---|
| 0 | 0 |
| 1-50 | £10 |
| 51-75 | £30 |
| 76-90 | £130 |
| 91-100 | £165 |
| 101-110 | £185 |
| 111-130 | £210 |
| 131-150 | £255 |
| 151-170 | £645 |
| 171-190 | £1040 |
| 191-225 | £1565 |
| 226-255 | £2220 |
| More than 255 | £2605 |
Car tax rates for cars registered between 1 March 2001 and 31 March 2017
If you bought your car before 1 April 2017 or buy a second-hand car that was registered before that date, the amount of car tax you pay will depend on the car's emissions. Below are the VED rates for cars registered between 1 March 2001 and 31 March 2017.
| VED band | CO2 emissions (g/km) | Annual rate |
| A | Up to 100 | £0 |
| B | 101-110 | £20 |
| C | 111-120 | £30 |
| D | 121-130 | £135 |
| E | 131-140 | £165 |
| F | 141-150 | £180 |
| G | 151-165 | £220 |
| H | 166-175 | £265 |
| I | 176-185 | £290 |
| J | 186-200 | £330 |
| K | 201-225 | £360 |
| L | 226-255 | £615 |
| M | More than 255 | £630 |
Why you still have to apply to tax your tax-free car
Owners of cars that qualify for free VED must still apply to renew their road tax, even though they don’t have to pay the fee.
Many low-emissions cars that were first registered before 1 April 2017 and emit up to 100g/km of CO2 qualify for free VED. However, their owners will still get an annual renewal reminder and must apply for road tax, even though there is nothing to pay. Anyone ignoring the renewal notice runs the risk of a fine of up to £1000.
The DVLA requires every car to be either taxed (even if it’s free) or declared off the road by filing a Statutory Off Road Notification (SORN) every year. It claims this ensures an up-to-date record of car ownership in the UK and whether those cars are being used on the road.
Cars first registered between 1 March 2001 and 31 March 2017 and producing 100g/km of CO2 or less qualify for free VED. As for cars registered after 1 April 2017, only zero-emissions electric vehicles are eligible for free VED; everything else is charged according to their CO2 emissions.
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