What is car tax and how is it calculated?
Key takeaways
Officially known as Vehicle Excise Duty (VED), car tax is a charge people pay to drive on public roads in the UK
There are currently four different systems of VED - which one applies depends on when your car was registered
From April 2025 electric car drivers have also been required to pay car tax.
What is car tax?
Car tax is officially known as Vehicle Excise Duty (VED), but sometimes also called ‘road tax’.
VED is a charge people pay to drive or keep cars and other vehicles (such as motorbikes and heavy goods vehicles) on public roads in the UK. It is overseen and collected by the Driver and Vehicle Licensing Agency (DVLA).
The VED system has gone under several changes in the past couple of decades; some cars are taxed under historical systems, others under a new system. To make things even more complex, car tax rates change each April in line with inflation, meaning how much drivers pay goes up each year.
From April 2025 electric car drivers have also been required to pay car tax.
How is car tax calculated?
There are currently four different systems of VED or road tax. Which one applies to you depends on the year and month your car was first registered. Cars are registered by a dealer or seller before being sold for the first time.
The four systems are for:
If you have a car or ‘light goods vehicle’ registered before 1 March 2001, the Vehicle Excise Duty rate is based on engine size.
There are two categories: below 1549cc and over 1549cc.
Engine size | Annual car tax (from April 2025) |
|---|---|
Below 1549cc | £210 |
Over 1549cc | £360 |
These costs apply if you pay for a year’s tax upfront or by annual direct debit. You’ll pay more if you pay monthly or every six months.
Road tax rates for cars first registered between March 2001 and April 2017 are divided into 13 bands depending on the CO2 emissions of the vehicle.
The lower the CO2 emissions, the lower the tax band, and the less you’ll pay.
In April 2025, Vehicle Excise Duty for alternative-fuel cars – such as hybrids, plug-in hybrids, and those that run on liquified petroleum gas (LPG), compressed natural gas (CNG) or biofuel – became the same price as for petrol or diesel cars. It was previously £10 cheaper.
Band | CO2 emissions | Annual price |
|---|---|---|
A | Up to 100g/km | £20 |
B | 101 to 110g/km | £20 |
C | 111 to 120g/km | £35 |
D | 121 to 130g/km | £165 |
E | 131 to 140g/km | £195 |
F | 141 to 150g/km | £215 |
G | 151 to 165g/km | £265 |
H | 166 to 175g/km | £315 |
I | 176 to 185g/km | £345 |
J | 186 to 200g/km | £395 |
K | 201 to 225g/km | £430* |
L | 226 to 255g/km | £735 |
M | Over 255g/km | £760 |
* Band K includes cars that have a CO2 emission figure over 225g/km but were registered before 23 March 2006
A new car tax regime came into effect on 1 April 2017 and applies to vehicles registered on 1 April 2017 or after.
Under this system, the first year a car is on the road, car tax is still related to the car’s emissions (but the bands are different than for cars registered before 1 April 2017). This first year tax has been dubbed the ‘showroom tax’.
In the first year, you will also have to pay extra if you have a diesel car that doesn’t meet the Real Driving Emissions 2 (RDE2) standard for nitrogen oxide emissions.
Then, from the second year, you will pay a standard rate. The current rate is £195.
From the second year, for five years, you’ll also pay a supplement if your vehicle has a list price of more than £40,000. The ‘list price’ is the published price of the vehicle before it’s registered for the first time (not necessarily the price you paid for it).
If you car is zero-emission and was registered before 1 April 2025 you are exempt from this expensive car supplement. Newer electric vehicles will be charged it.
This expensive car supplement is currently £410 a year.
So, in summary, under this system, you’ll pay:
First year - showroom tax (based on emissions)
Years two to six – standard rate tax plus expensive car supplement if the list price is £40k+
Years six onwards – standard rate tax
Second year (and onwards) tax rates
Standard Annual car tax | Vehicles with a list price of £40k+ (years 2 to 6) |
|---|---|
£195 | £620 |
CO2 emissions | Petrol/RDE2 diesel/alternative fuel/zero emission cars | RDE Diesel cars |
|---|---|---|
0g/km | £10 | £10 |
1 to 50g/km | £110 | £130 |
51 to 75g/km | £130 | £270 |
76 to 90g/km | £270 | £350 |
91 to 100g/km | £350 | £390 |
101 to 110g/km | £390 | £440 |
111 to 130g/km | £440 | £540 |
131 to 150g/km | £540 | £1,360 |
151 to 170g/km | £1,360 | £2,190 |
171 to 190g/km | £2,190 | £3,300 |
191 to 225g/km | £3,300 | £4,680 |
226 to 255g/km | £4,680 | £5,490 |
Over 255g/km | £5,490 | £5,490 |
Cars registered before 1 March 2001
Cars registered between 1 March 2001 and 31 March 2017
Cars registered on or after 1 April 2017
Cars in their first registration year
You can check the current tax rates for your vehicle and if your car is taxed on the UK government's website.
What were the changes to road tax in 2025?
From 1 April 2025 electric car owners were also charged road tax. How much Vehicle Excise Duty you must pay depends on when your EV was registered.
How much is car tax for electric vehicles?
Road tax at the lowest band (currently £20) paid by other cars registered during this timeframe.
Road tax at the standard rate (currently £195) for the second year of registrations onwards.
Showroom tax at the lowest rate (currently £10) for the first year after the car is registered
Road tax at the standard rate (currently £195) for the second year onwards
The £410 expensive car premium for registration years 2-6 if the car’s list price was £40,000 or more
Electric cars registered between March 2001 and March 2017
Electric cars registered between April 2017 and March 2025
Electric cars registered in or after April 2025
How do I pay my car tax?
Exactly how much you pay for car tax also depends on how you pay. Your options are:
single payment every 12 months
direct debit every 12 months
monthly direct debit for 12 months
single six-month payment
direct debit every six months
The cheapest option is to pay for 12 months in one go. Paying every month or every six months costs more.
For example, the 2025 standard car tax for a car registered after April 2017 is £195. But it will cost:
£195 if you pay by 12 monthly direct debit payments (£16.25 a month)
£214.50 if you pay by 2 six-monthly payments (£107.25 per six months)
£204.76 if you pay by 2 six-monthly direct debit payments (£102.38 per six months)
You can pay car tax on the Gov.uk website, where there's a page entitled 'Tax your vehicle'. The DVLA will send you a reminder when your car tax is due – this is called a V11 letter and will contain a reference number.
You can also pay car tax at most Post Offices if you take your V11 or V5C with you. Alternatively, the DVLA's 24-hour telephone vehicle tax service is on 0300 123 4321.
🚩 You need car insurance before you can tax your car.
What happens to car tax if I sell my car?
You cannot transfer Vehicle Excise Duty on a car from one person to another. So, if you sell your car you will need to reclaim a refund of any unused tax.
For example, if you buy 12 months’ car tax and sell your car after seven months, you’ll get five months back. The new owner will need to tax the car straight away.
How do I check my car's first registration date?
To find your car’s registration date:
Check your car's V5C document (the ‘logbook’)
visit the DVLA's 'get vehicle information' service and enter your registration
This free service also shows your car’s CO2 emissions which determine which car tax band your vehicle is in under the 1 March 2001 and 31 March 2017 system.
Your car’s registration date determines which system is used to tax your car. Your car’s registration date is fixed – it doesn’t matter how many times the car is bought and sold.
What happens if I don’t pay my car tax?
You’ll be fined £80 if you don’t tax your vehicle. You’ll also have to pay for the time it was not taxed. If you don’t pay your fine, your vehicle could be clamped or crushed, or your details passed to a debt collection agency.
Drivers haven’t been obliged to display a tax disc since 2014. Instead, records are held electronically. If the police want to check your car is taxed they use a network of Automatic Number Plate Recognition (ANPR) cameras which link up to the DVLA VED database.
If you are unable to drive for a period of time, you can register for a Statutory Off Road Notification (SORN) – but you’ll need to keep your car somewhere other than on a public road (i.e. a garage or private parking space) and not drive it. If you want to keep your vehicle on a public road you must still tax it, even if you don’t drive it.
Read more about what happens if you forget to tax your vehicle.
Which cars are exempt from car tax?
Some types of vehicles are exempt from car tax. These include:
vehicles used by a disabled person
disabled passenger vehicles
historic vehicles (made before 1 January 1983)
mobility vehicles and powered wheelchairs
vehicles used for agriculture, horticulture and forestry
vehicles with a SORN
If any of the above applies to you, you’ll need to apply for a vehicle tax exemption (don’t just leave the vehicle untaxed).
Cars modified for disabilities may require additional cover that isn't included in standard insurance policies.
