Car Tax Bands

You’ve got your driving licence. You’ve bought or leased your first car. But there are three important documents you have to get before you can legally drive on the UK’s roads. One of these is car insurance, which covers you and other drivers in case of an accident. Another of these is an MOT to demonstrate if the car is fit to be driven or if it needs repair. The third is Vehicle Excise Duty or car tax.

When you go to tax a vehicle, suitable insurance cover must be in place, along with a valid MOT. Both of these are checked electronically when you apply for car tax. This links all three necessary documents together.

What is Vehicle Excise Duty or car tax?

Vehicle Excise Duty (VED) is also known as car tax, vehicle tax or road tax and is a tax charged by the UK Government for driving on public roads. It has been charged on cars and other motor vehicles since 1937.

But the way the tax is measured, collected, used, demonstrated as paid, and calculated has changed over time.

How is VED collected?

Road tax was originally collected by local authorities but now is processed by the DVLA (Driver and Vehicle Licensing Agency). The DVLA receives almost six billion pounds a year from road tax.

How is car tax paid?

The easiest way to pay road tax is online through an online service or via direct debit. Additional charges usually apply if you pay via direct debit. Obviously, these are recent developments in the history of road tax.

To pay your tax you’ll need a reference number from your vehicle logbook (V5C), from a letter from the DVLA, or from a green, new keeper supplement (V5C/2) which comes with a brand new car.

You can tax a vehicle at some Post Offices that are licenced to deal with vehicle tax.

You can pay your tax every year or in blocks of six months.

When do you have to pay your car tax?

You will automatically receive a reminder before the tax is due to expire, which is always at the end of a given month. This is a notice period.

How is road tax used?

When the tax was originally collected, it was always used to extend and improve roads. But now the money is put in with the rest of government income and can be spent on anything from hospitals to defence to funding prisons.

How do you show you have paid car tax?

In the past, you could demonstrate you had paid your car tax by putting a tax disk in your vehicle’s front window. This ended on 1st October 2014. The whole system is now computerised and there is no visual proof of payment attached to your vehicle.

Instead, car tax is run through an electronic database. The police and other law enforcement agencies use a network of Automatic Number Plate Recognition (ANPR) cameras to link to this database. This enables the police to work out which vehicles are being driven without tax.

How is car tax or VED calculated?

The UK government decides how much car tax is charged. They used to do this with a flat fee system, but this has been replaced in recent years to try and use the tax system to push people into driving cars which are less polluting to the environment. The way in which car tax is now calculated changed in March 2020 and is more complicated to understand, but we will try our best.

The amount you are charged depends on different factors including the date the car was first registered for road use, and its engine size or level of CO2 emissions. All of these things are known as ‘variables’ – each one can be different, and each one can mean you pay a different rate of car tax. In general terms, the more emissions a vehicle produces, the more VED you will pay.

What are the bands applied to cars for road tax?

There are different sets of bands in place for car tax depending on the age of the car. The three age phases are:

  • Cars first registered after 1 April 2017
  • Any cars first registered between 1 March 2001 and 31 March 2017
  • Cars first registered before 1 March 2001

How does it work for cars first registered after 1 April 2017?

If you have a car that was first registered after 1st April 2017, there is a system of bands in place related to how polluting the vehicle is. The level of pollution is based on the level of CO2 emissions.

Another factor is the ‘showroom tax’ which the government charges. This means that a car is more expensive to tax in its first year.

You also have to pay a higher rate for diesel cars that do not meet the Real Driving Emissions 2 (RDE2) standard for nitrogen oxide emissions.

The table below describes the current level of road tax for all petrol-based cars and those diesel cars which meet RDE2 standards.

Emission level                   First year

0g/km                                 £0

1 to 50g/km                       £10

51 to 75g/km                    £25

76 to 90g/km                    £120

91 to 100g/km                  £150

101 to 110g/km                £170

111 to 130g/km                £190

131 to 150g/km                £230

151 to 170g/km                £585

171 to 190g/km                £945

191 to 225g/km                £1,420

226 to 255g/km                £2,015

Over 255g/km                   £2,365

There is another complication. VED for alternative-fuel cars – such as hybrids, plug-in hybrids, and those that run on LPG, CNG or biofuel – is around £10 less than regular petrol or diesel cars. This is factored into the bill you receive and the charge you are expected to pay.

There is also an additional £355 per year for all vehicles (cars or motorhomes) with a list price of over £40,000 (this is not reflected in the above table). You currently do not have to pay this if you have a zero-emission vehicle, but this is likely to change in 2025.

What about the second year of tax for cars registered after 1 April 2017?

After the first year, the tax system gets a bit simpler. Cars made beyond 2017 are judged to be mostly less polluting than older models, so there is just a fixed charge of £165 for all cars that are not exempt.

However, with so many variables, it is easy to get confused about which charging band your vehicle falls into. We can help.

You can enter your licence number into the calculator below and we will draw on DVLA data to give you an accurate figure for the tax which you owe. We will also tell you when it is due.

How does it work for cars first registered between 1 March 2001 and 31 March 2017?

For cars first registered between 1 March 2001 and 31 March 2017, the rate of road tax is based on both fuel type and CO2 emissions.

All cars registered in this period fall into 13 bands – and the general rule is the lower the CO2 emissions, the lower the tax band. This emissions data is taken from the manufacturer’s CO2 emissions figures.

VED band            CO2 emissions                   Annual rate

A                            Up to 100g/km                 £0

B                            101-110g/km                     £20

C                            111-120g/km                     £30

D                           121-130g/km                     £135

E                            131-140g/km                     £165

F                            141-150g/km                     £180

G                           151-165g/km                     £220

H                           166-175g/km                     £265

I                             176-185g/km                     £290

J                             186-200g/km                     £330

K                            201-225g/km                     £360

L                            226-255g/km                     £615

M                          Over 255g/km                   £630

Again, the rate of road tax for alternative-fuel cars (hybrids, plug-in hybrids, or those run on LPG, CNG or biofuel)  is around £10 less than regular petrol or diesel cars.

If you don’t know the band into which your car falls and it was first registered between March 2001 and March 2017, we can help.

You can enter your licence number into the calculator below and it will give you an accurate figure for the tax which a car owes and when it is due.

How does it work for cars first registered before 1 March 2001?

Cars registered before 1 March 2001 are classed only by engine size. This makes the system easy to understand. The split is not over 1549cc and over 1549cc.

The current tax rates for pre-March 2001 cars are:

12 months           Six months

Not over 1549cc               £180                     £99

Over 1549cc                      £295                     £162.25

If you have a car first registered before 1 March 2001 but don’t know its engine size, just use our easy-to-use calculator below and it’ll give you the amount of tax you owe

Are other vehicles also subject to different levels of road tax?

Virtually all motor vehicles are taxed using an adaptation of the principles used to tax a car. Motorcycles are also taxed based on a formula that includes different costs based on fuel efficiency, The rate of vehicle tax for motorhomes is based on the vehicle’s revenue weight (also known as maximum or gross vehicle weight). A similar scale is also applied to light goods vehicles.

You can find out the road tax rate that will be applied to any vehicle by simply using our road tax calculator.

What about electric cars?

Over recent years, cars with 0g/km CO2 emissions, such as electric cars, do not have to pay any car tax since they are not polluting in any way.

However, this is changing. From 2025, electric car owners will pay both a first-year rate and then a standard rate of £165 per year.

Does anyone not have to pay car tax?

Exemptions for road tax include vehicles for disabled people, vehicles over forty years old, or those linked to agriculture, horticulture, and forestry.

Even if you qualify for not having to pay road tax you must still register the vehicle and let the DVLA apply the zero tax rating.

What is SORN?

You need to tell the DVLA if you’re taking your vehicle off the road, for example, if you’re keeping it in a garage. This is sometimes called a

A ‘Statutory Off Road Notification’ (SORN) is a document issued by the DVLA for vehicles that are declared off the road, for example, if they are stored in a garage. You apply directly for SORN to the DVLA and will not have to pay car tax while it remains off the road. You will also get a tax refund for any full months of the remaining tax. Your SORN will always start on the first day of the next month if you apply in the month your vehicle tax is due to expire.

SORN is a legal notification and means you cannot use the vehicle on the road until you tax it again.

What happens to your car tax if you sell your car to someone else?

If you have sold your car, you should inform the DVLA and they will change their car tax records.

You can no longer transfer any unexpired tax to the new registered keeper. This means a new owner must tax the car before driving away.

What other changes should you notify the DVLA of?

You should also tell the DVLA if the car has been written off by an insurance company, scrapped, stolen, exported out of the UK or becomes registered as exempt from vehicle tax

Are there fines for not having road tax?

Driving without the tax properly paid on your car is monitored by the police using Automatic Number Plate Recognition (ANPR) cameras. The VED system is enforced through fines and penalties including:

  • A Late Licensing Penalty (LLP) of £80 for late payment, which reduces to £40 if you pay within 33 days.
  • If you fail to pay fines, the cases will often be referred to a debt collection agency.
  • Beyond a month or so late and you’ll be issued with Out of Court Settlement (OCS) letter. The OCS fixed charge is £30 plus one-and-a-half times the outstanding vehicle tax rate.
  • Failure to pay an OCS usually results in a case going to a magistrates’ court. The court can impose a penalty of £1,000 or five times the amount chargeable (whichever is greater).
  • There is also a penalty of £2,500 for using or keeping an untaxed vehicle on a public road with a SORN in place.
  • Untaxed vehicles can also get clamped, which further increases costs.