Road tax: all you need to know

We explain the intricacies of the Vehicle Excise Duty regime

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What is road tax (VED)?

Road tax is the commonly-used name for vehicle excise duty (VED), which is an annual tax that must be paid on all vehicles that are used on public roads. The cost of this tax firstly depends upon when your car was registered and then on either the size of the engine or its CO2 emissions.

How much does road tax (VED) cost?

Car registered before March 1, 2001 fall into two tax bands - engine sizes above and below 1549cc. Cars registered after March 1, 2001 are split across 13 tax bands (A-M) based upon CO2 emissions in g/km.


CO2 Emissions in g/km (tax band) First year rate Annual rate
Up to 100 (A) £0 £0
101 - 110 (B) £0 £20
111 - 120 (C) £0 £30
121 - 130 (D) £0 £110
131 - 140 (E) £130 £130
141 - 150 (F) £145 £145
151 - 165 (G) £180 £180
166 - 175 (H) £295 £205
176 - 185 (I) £350 £225
186 - 200 (J) £490 £265
201 - 225 (K) £640 £290
226 - 255 (L) £870 £490
Over 255 (M) £1,100 £505


The rates are different for cars registered after April 1, 2017. In the first year of registration, the rate is set according to the car’s emissions. In subsequent years, all cars will pay a flat ‘standard’ rate of £140 (unless they have zero emissions, in which case they will pay nothing).

Those costing more than £40,000 will be required to pay a supplement for five years (see below).


Emissions in (g/km CO2) First year rate Annual rate
0 £0 £0
1-50 £10 £140
51-75 £25 £140
76-90 £100 £140
91-100 £120 £140
101-110 £140 £140
111-130 £160 £140
131-150 £200 £140
151-170 £500 £140
171-190 £800 £140
191-225 £1,200 £140
226-255 £1,700 £140
Over 255  £2,000 £140


Cars that cost more than £40,000 will have to pay an annual supplement of £310 per year for five years. The g/km measure quantifies the grams (g) of CO2 released for every kilometre (km) the car is driven.

The less CO2 released over the same distance, the less fuel is being used.

You can buy road tax for the full year or for six months, though there is a 5% surcharge for a six-month tax disc.

Motorists can also spread the cost of an electronic tax disc by paying in monthly instalments, though again the government levies the 5% surcharge.

What are the changes affecting diesels registered after April 2018?

From 1 April 2018, buyers of new diesel cars that do not meet Euro 6 emission standard will be bumped up into the next band in the first year of registration. For example, a car with emissions of 76 - 90 g/km CO2, which would pay £100 at the moment, will pay £120 after April.

The standard £140 rate will apply to these diesel cards in the second and subsequent years of registration.

Why are there no more paper tax discs?

DVLA stores all vehicle ownership records electronically and both it and the police now use the electronic vehicle register to check if a vehicle should be on the road.

As a result, drivers no longer need to display a paper tax disc in their windscreen.

If you’re buying a vehicle

If you’re buying a car, you can't carry over any remaining months on the tax disc – and the seller can't give or transfer that ‘unused’ tax to you, whether they want to or not.

In other words, if you buy a car in March that is taxed until August, you cannot continue to use the existing tax payment that is associated with the car.

Instead, ou have to tax it yourself. And here’s the kicker: you’ll have to make the purchase before you can drive the vehicle. There is no grace period.

If the vehicle is already registered in your name, you can use the 11-digit reference number on the log book (or V5C to give it its true title).

If you have only just bought the vehicle and it is not yet registered, you will need the 12-digit reference number on the New Keeper Supplement (V5C/2).

You can buy a tax disc online at GOV.UK or use the automated telephone service 0300 123 4321.

Alternatively, you can visit your nearest Post Office. You will also need a valid MOT and motor insurance. If you buy online the system will check to see if you’ve got everything in place.

A motor trader is still able to tax the vehicle on your behalf.

If you’re selling a vehicle

If you're selling your car, you need to notify the DVLA by returning the relevant portion of the V5C, or risk a fine of £1,000.  

If there are any full months outstanding on the road tax, a refund will be processed automatically. So if your tax disc ran until September 1 2015, for example, and you sold the car in the middle of May 2015, you will be entitled to a three-month refund (for June, July and August).

(Clearly this means you won’t get a full refund – something that has irritated many drivers, especially as the new owner has to tax the vehicle from the point they purchase it, creating a payment overlap.)

Also bear in mind that surcharges are not refundable. So, if you have paid in instalments or have a six-month tax disc, you could lose out.

Don’t even think about dodging tax as the penalties can be harsh – including a fine of up to £1,000. Remember, too, that ignorance of the rules is no defence.

If you’re transferring ownership of a vehicle

If you transfer ownership of your car to someone else without actually selling it – if you’ve given the car to your partner or a friend, for instance – you still can’t pass the tax on and will have to still register the transfer of the vehicle with DVLA using the V5C in the same way as if you had sold it.

You’ll automatically get a refund for any remaining full months left on the vehicle tax when ownership was transferred and DVLA will also cancel your direct debit if you were paying monthly.

If you’ve taken ownership of a vehicle transferred to you by someone else, you’ll need to tax the vehicle or make a statutory off-road notification (SORN) from the date it was transferred to you.

If the vehicle is off the road (SORN)

In the same way you can’t transfer road tax when you buy, sell or transfer a vehicle, you can’t transfer a SORN either.

So if you buy a car that has been declared as being kept off the road, this SORN can’t be included as part of the sale or passed on to you so you’ll have to tell DVLA the car is off the road by making a SORN. You can do this at GOV.UK or by phone on 0300 123 4321.

Again, don’t even think about dodging tax as the penalties can be harsh – if your vehicle isn’t taxed or it has no SORN it may be clamped and could be hit with a fine of up to £1,000.

And remember, once more, ignorance of the rules is no defence.


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