Car tax bands – a guide to Vehicle Excise Duty and UK road tax rates

Article Tom Goodlad Hugo Griffiths
Apr 6, 2016

We explain the current emissions-based rules surrounding Vehicle Excise Duty – often referred to as ‘car tax’ or ‘road tax’

Road tax, car tax or – to give it its official name – Vehicle Excise Duty (VED) is a bill most car drivers face each and every year. Knowing how much road tax a car incurs is important, and it’s something to definitely bear in mind if you’re thinking of buying a new car. The VED system is being changed in 2017 but, for the majority of drivers, the more carbon dioxide (CO2) your car emits, the more road tax you’ll pay.

While cars first registered before 1 March 2001 are taxed according to their engine size, CO2 emissions affect road tax rates for most business and private drivers. The rules for company car tax are slightly different (and more complicated), and we’ve dealt with that subject separately.

Read our guide to company car tax

New car tax bands for cars registered after 1 March 2001 

If your car was registered on or after 1 March 2001, its road tax will be calculated based on how much CO2 it emits, measured in grams per kilometre (g/km). There are two rates: one for the first year and a second rate, which applies to each subsequent year. While the first-year rate is – in some cases – higher than the rate you’ll pay annually, this only applies if you’re the first owner of the car and is often included in a new car’s ‘on-the-road’ price.

Best road-tax-free cars to buy

Our table below details how much you’ll pay if your car was registered on or after 1 March 2001.

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) £185 £185
166-175 (H) £300 £210
176-185 (I) £355 £230
186-200 (J) £500 £270
201-225 (K) £650 £295
226-255 (L) £885 £500
Over 255 (M) £1,120 £515

Tax bands for cars registered before 1 March 2001

If your car was first registered before 1 March 2001, working out how much tax you’ll pay is a far simpler affair as there are only two groups, based on engine size.

If your car’s engine is under 1,549cc, you’ll pay £145 a year to tax it, whereas cars with engines larger than 1,549cc are liable for an annual road-tax bill of £230. If you’re after a very cheap older car (perhaps a ‘station car’ for your commute to work) then keep an eye out for models with a 1.5-litre engine or smaller, as you’ll save yourself a fair bit of money each year.

Cars that are 40 years old (or more) are considered classics and are exempt from road tax.

Vehicle Excise Duty (VED) changes coming in April 2017

During the Government’s 2015 Budget, a big shake-up of the UK’s road-tax system was announced. These changes will be implemented in April 2017 and will only affect cars bought after that date. Cars registered or bought before then will continue to be taxed under the current system.

Our table below details these changes and you can click here for the full lowdown on the new system.

CO2 emissions in g/km  First year rate Standard 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 over £40,000 subject to £310 extra a year

Click here to read more about the current process of taxing your car.

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