Car tax bands – guide to Vehicle Excise Duty and how much you have to pay

Article Tom Goodlad
Feb 5, 2016

Car tax, road tax, Vehicle Excise Duty (VED) – call it what you will. Our guide explains all

Vehicle Excise Duty (VED) – called ‘road tax’ or ‘car tax’ by some – is payable by almost all car owners in the UK, so it's important to know how much you can expect to pay each year – especially as car tax bands can change. A VED shake-up is happening in 2017, details of which can be found further down this page.

For now, tax differs for private and company car drivers, plus the way in which it's calculated varies depending on the age of the car. If your car was registered after 1 March 2001, the amount of tax you pay is based on the car's carbon dioxide (CO2) emissions. Cars registered before this date have their tax calculated based on the size of their engine. 

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 (Y-reg onwards), then the amount of tax you pay is based on how much CO2 the car emits in grams per kilometre (g/km). 

There are two rates, one for the amount you’ll pay in the first year, and another for how much you’ll pay every year after that. This only applies if you’re the first owner of the vehicle and bought it brand-new. The first-year cost is, in some cases, higher than the subsequent rate, but is often included in a new car's ‘on-the-road’ price. 

Best road-tax-free cars to buy

We’ve put together a table (below) that details new car tax bands for cars 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) £180 £180
166-175 (H) £295 £205
176-185 (I) £350 £225
186-200 (J) £490 £265
201-225 (K) £640 £290
226-255 (L) £870 £490
Over 255 (M) £1,100 £505

Tax bands for cars registered before 1 March 2001

Working out tax for a car registered before 1 March 2001 is much simpler than for other cars. It's based on the car's engine size and split into two bands. 

If your car has an engine larger than 1,549cc, you’ll pay £230 a year to tax it, whereas you’ll pay £145 a year if the engine is smaller than 1,549cc. 

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

Vehicle Excise Duty (VED) changes coming in April 2017

As part of the UK Government's 2015 Budget, car tax received a significant shake-up. The new system will come into effect in April 2017 and will only affect cars bought after that date. Cars registered or bought before this date will still fall into the current car tax bands. 

See our table below for a breakdown of the new rates, or click here to get the full story about the new 2017 VED changes.

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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