How much is car tax: VED rates explained

Owners of cars with the highest emissions get the biggest hikes in road tax, but electric car owners will have to pay VED from 2025...

Car tax changes in 2018 – what do I need to know?

There's an old saying which states that nothing in life is certain except death and taxes – and while we're not specialists on the former, we can certainly tell you everything you need to know about new car tax bands.

Most buyers of new and used cars will need to pay Vehicle Excise Duty (VED), and this tax usually rises every April. The rises are generally calculated in line with inflation based on the Retail Price Index (RPI) – for the most recent tax rise, in 2024, these equate to an increase of around 6%.

New car tax bands: How much will it cost to tax my car?

For most drivers of new and older cars, the annual cost from the most recent tax rises have gone up by between £5 and £10, but drivers of new vehicles with the highest emissions will pay £140 more in the first year. The first-year rate of car tax is based on the car's CO2 emissions, and from 1 April 2024 only pure electric cars 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 vehicle (EV) models in 2024; plug-in hybrids are not exempt from it. Anyone buying a new car costing more than that from 1 April has 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 £190, while hybrid owners will pay £180 a year.

VED tax rises to cost car buyers thousands

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Electric vehicles to pay VED from next year

There are some bigger changes due to happen from April 2025. From this time, EVs will lose their exemption from VED, and buyers will have to pay the next lowest first-year rate, which is currently £10. After the first year, owners of EVs will have to pay the standard rate of VED, which is currently £180; this will rise to £190 in April 2024 and will increase again in 2025.

Additionally, buyers of EVs costing more than £40,000 will be liable for the extra annual fee for years two to six that's payable for more expensive new cars. This is currently £390 a year, but is likely to have increased by 2025. 

Alongside this change, hybrid cars will lose the £10 discount that currently applies to them on first and subsequent year fees, so they will also pay the same as cars with petrol and diesel engines. 

First year VED rates

CO2 emissions First-year VED rate
0 0
1-50 £10
51-75 £30
76-90 £135
91-100 £175
101-110 £195
111-130 £220
131-150 £270
151-170 £680
171-190 £1095
191-225 £1650
226-255 £2340
More than 255 £2745

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 £35
D 121-130 £160
E 131-140 £190
F 141-150 £210
G 151-165 £255
H 166-175 £305
I 176-185 £335
J 186-200 £385
K 201-225 £415
L 226-255


M More than 255 £735

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.

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.

How to pay for road tax

You can pay for your car tax online by visiting the Government's dedicated website. To do so, you'll need a unique reference number, which can be found on tax reminders issued by the DVLA, the V5C log book for your car, or from the green 'new keeper' slip in the log book if you've just bought the car.

You can also pay for road tax over the phone, although doing so means you cannot pay by direct debit, or you can pay by visiting a post office.

It's important to remember that even if you are legally exempt from paying road tax, for example if you're disabled, then you still need to register your car for tax purposes.


SORN: Taking your car off the road

You don't need to pay car tax on a car which is legally declared as being off the road, and the process of doing this is called a Statutory Off Road Notification – or SORN for short.

If you declare your car as being SORN, you can get a refund for any full months of remaining tax the car has, but you cannot legally use it on the road until you tax it again. If you've already sold your car, you don't need to delcare it as being SORN, but you do need to tell the DVLA that it has been sold.

The SORN starts immediately if the tax on your car has already expired, but otherwise it will begin on the first day of the next month after your tax expires.

You can apply for the SORN notice online, and to do so you'll need to have the 11-digit number from your car's V5C document, and the 16-digit number from your car's tax reminder letter. You can also apply for the SORN notice by phone or by post.

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