Car tax bands: everything you need to know

Sep 18, 2013

How much will your car cost to tax? Here's all the information you need about car tax bands

Car tax, sometimes called road tax, is something all motorists have to think about every year, but it can sometimes get confusing working out how much a new car is likely to cost you in tax over the years.

The way car tax bands are worked out is based on the carbon dioxide (CO2) emissions that your car puts out over one kilometre. If your car pollutes the air a lot, then expect it to cost more to tax – and if your car is kinder to the environment, it could even cost nothing at all to tax.

The different tax rates

Car tax, or Vehicle Excise Duty (VED), has two elements to consider. There's the main tax rate, which is based on the emissions, and a first year's rate, which can be more or less expensive than the normal rate.

This means that a new car might be free to tax for the first year, but then cost £30 a year from the second year onwards. Some cars are completely tax free (if they emit less than 100g/km of CO2) but all cars that produce up to 130g/km are free to tax for the first year.

It's important to make sure you know the difference between these two aspects of car tax. The first year could cost you nothing at all, but then you could be landed with an unexpected cost of up to £105 if you didn’t consider the main annual rate.

CO2 emissions vs engine size

These car tax rates only apply to cars made after 1 March 2001, however. If you buy an older car then the tax is based on engine size instead. Cars under 1549cc (1.55 litres) cost £140 per year to tax, while everything above 1549cc costs £225 per year.

See the table below to work out what your car will cost to tax per year. For example if you buy a brand-new Ford Fiesta Zetec 1.25, which has emissions of 120g/km, the first year rate will be free and then the annual rate will be £30 each year thereafter.

New car tax regulations

From 1 October 2014, cars will no longer need to display a paper tax disc on their windscreens because records will be fully electronic. Motorists will also be able to pay their tax biannually or monthly instead of in one annual payment, but a 5% surchage will apply to these options.

The prices in the table below come into force on 1 April 2014 following the Chancellor's budget statement on 19 March 2014. They reflect the approximate £5 increase announced in tax for cars which fall into bands D to K and the £10-£15 increase for cars in the highest L and M bands.

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) £290 £205
176-185 (I) £345 £225
186-200 (J) £485 £265
201-225 (K) £635 £285
226-255 (L) £860 £485
Over 255 (M) £1,090 £500

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