UK Car Tax Bands – What you need to know

UK Car Tax Bands – What you need to know

When looking to buy a new or used car you should also take into consideration the costs associated with running the car. Vehicle tax is an important cost to consider in your motoring journey as it can differ quite considerably depending on the type of vehicle.

Vehicle tax, car tax or road tax – is essentially a tax for using a vehicle on public roads.

Since 2001, all cars have been charged a rate of road tax when they’re first registered, which is based on their CO2 emissions. Cars with zero and low emissions pay zero road tax as an incentive. But from April 2025, electric cars, vans and motorcycles will begin to pay vehicle road tax in the same way as petrol and diesel vehicles currently do.

The RAC says “Each year, the DVLA collects £5.6 billion a year in Vehicle Excise Duty (VED), but not all of this is spent on road improvements and infrastructure. In fact, VED is grouped in with other forms of tax, meaning the income from your road tax is just as likely to be spent on education or healthcare as it is on roads.”

Who needs to pay car tax? Eligibility for Car Tax (Who needs to pay and when)

Who needs to pay car tax

According to the DVLA, you must tax your vehicle if you are using it or keeping it on a public road. If you’re keeping the vehicle off the road, it must either be taxed or have a Statutory Off Road Notification (SORN).

Exemptions from car tax

Below are vehicles that are exempt from road tax as specified on the DVLA website:

  • Vehicles used by a person living with a disability
  • Disabled passenger vehicles used by organisations providing transport for people living with a disability
  • Vehicles made before 1981
  • Mobility scooters and powered wheelchairs
  • Electric vehicles
  • Steam-powered vehicles
  • Vehicles used for agriculture, horticulture and forestry

How much car tax will you pay?

Your first tax payment is based on the vehicle’s CO2 emissions. These are detailed on the site as follows:

CO2 emissionsDiesel cars (TC49) that meet the RDE2 standard and petrol cars (TC48)All other diesel cars (TC49)Alternative fuel cars (TC59)
1 to 50g/km£10£25£0
51 to 75g/km£25£120£15
76 to 90g/km£120£150£110
91 to 100g/km£150£170£140
101 to 110g/km£170£190£160
111 to 130g/km£190£230£180
131 to 150g/km£230£585£220
151 to 170g/km£585£945£575
171 to 190g/km£945£1,420£935
191 to 225g/km£1,420£2,015£1,410
226 to 255g/km£2,015£2,365£2,005
Over 255g/km£2,365£2,365£2,355

Your second payment and onwards is different and can be found below:

Fuel typeSingle 12 month paymentSingle 12 month payment by Direct DebitTotal of 12 monthly payments by Direct DebitSingle 6 month paymentSingle 6 month payment by Direct Debit
Petrol or diesel£520£520£546£286£273

Vehicles with a list price of £40,000 and more will pay a different rate of tax. Below are the rates:

Fuel typeSingle 12 month paymentSingle 12 month payment by Direct DebitTotal of 12 monthly payments by Direct DebitSingle 6 month paymentSingle 6 month payment by Direct Debit
Petrol or diesel£520£520£546£286£273

Factors affecting the amount of car tax

Vehicle tax varies depending on the type of vehicle you drive and the fuel that is uses. A car that generates more emissions will likely result in a higher car tax.

The age of the vehicle

The role that emissions plays is the main way that car tax is calculated for cars registered after 1st March 2001.

This is then broken down into bands which vary from A (the lowest) to M (the highest) and are based on the volume of CO2 produced per kilometre (g/km).

For cars registered before 1st March 2001, VED is determined by taking into importance the engine size.

Variable charges

It is important to note that vehicle tax prices can change from year to year, so it is important to check the latest rates before you buy a car and ensure you could afford the tax if there were increases for the time you are looking to own the car for.

How to calculate car tax using the official government figures

If you find the government website vehicle tax breakdown confusing and just want to know how much you will pay, you can check your car tax using this website.

Paying your car tax

  • You can renew your car tax online through the DVLA’s website. It will not take you long at all and it can be done any time of the day. You will be required to use a reference number from either your V11, the V5C which is the log book which must be in your name or the green new keeper slip if you have just purchased the vehicle. You can pay for your tax by debit or credit card or direct debit.
  • There are consequences for not paying your car tax. It is illegal to drive your car with no tax. The DVLA could fine you and if you ignore this fine, they are within their rights to clamp or even crush your car.

Car tax when selling your vehicle

Car tax is not transferrable between owners of a vehicle. The seller should notify the DVLA they are no longer the legal owner and the DVLA will refund any tax unused.

The new owner becomes responsible for the road tax as soon as the DVLA are informed that authorised ownership has changed.

The new owner of the vehicle can use the logbook’s 11-digit reference number to tax the vehicle. New owners that are waiting for a new V5C to arrive must use the 12-digit reference number on the new keeper slip instead. Sellers are legally required to provide this slip from the logbook, also known as V5C/2, when the sale takes place.

Frequently asked questions about car tax

How to challenge a car tax penalty

You can appeal against a DVLA fine, but you will need to provide proof that you had taxed your vehicle, or that you had already told the DVLA that you were no longer the vehicle’s keeper. Your proof must be dated before the offence.

The letter you got from DVLA saying you’ve been fined will tell you how to appeal and how long you have to do this by.