Car tax bands – how much will you pay for Vehicle Excise Duty?

Article Tom Goodlad
Oct 28, 2015

Car tax bands change all the time, so here’s our up-to-date guide on how much you’ll pay to tax your car

Vehicle Excise Duty (VED), car tax, road, tax – call it what you like – every motorist needs to know about it and how much it’ll cost them. It's a yearly payment that drivers must make to the government in order to use their cars in the UK.

There are plenty of costs associated with running a car and tax is one of the most important for buyers – both private owners and company car users. It's worth noting at this point that there are different tax bands and rates for private and company users. You can read our guide to company-car tax bands here

Cars fall into these different bands based on the CO2 emissions they produce, so you pay different annual rates for different levels of CO2 emissions. Tax rates range from nothing for the cleanest cars, while at the other end of the scale it can be as much as £505 a year.

New car tax bands 

As previously mentioned, car tax bands are determined by the amount of carbon dioxide produced for every kilometre travelled – expressed as a ‘g/km’ figure. In simple terms, the more CO2 emitted by a car, the higher the tax band it falls into and the higher your tax bill will be.

For some vehicles, the tax rate after the first year can either increase or decrease – this is part of the latest vehicle tax band rates set out in the 2015 Budget.

The table below outlines the current tax bands and rates announced as part of the 2015 Budget, so you can easily see how much yours will cost if you know what your car's CO2 emissions are. We’ve only included what you pay in the second and subsequent years of ownership, because the amount you pay in the first year is normally included in the initial cost of the car.

CO2 Emissions in g/km (tax band) Annual rate
Up to 100 (A) £0
101-110 (B) £20
111-120 (C) £30
121-130 (D) £110
131-140 (E) £130
141-150 (F) £145
151-165 (G) £180
166-175 (H) £205
176-185 (I) £225
186-200 (J) £265
201-225 (K) £290
226-255 (L) £490
Over 255 (M) £505

Car tax for cars registered before March 2001 

The way car tax is calculated for cars registered before 1 March 2001 is slightly different. Instead of being based on these cars’ CO2 emissions, the amount of tax is determined by the size of their engines. As you might expect, the larger the engine, the higher the tax rate.

Needless to say, the old system is much simpler to get your head around than the new one. If your car's engine size is less than 1,549cc (just over 1.5 litres) your annual tax rate will be £145, while engines larger than 1,549cc cost £230 to tax for a year. It must be noted, though, that if you pay monthly, or for six months’ tax, then the cost goes up slightly. Make sure you know the costs before you go for a particular payment method.

VED changes for 2017 

Also included in the 2015 Summer Budget was the announcement of a huge hike in Vehicle Excise Duty for 2017 that could cost new car buyers thousands. The changes will come into effect in April 2017 and will be applicable to cars purchased after that date – cars purchased before then will continue to be taxed under the current system. 

There are quite a few changes occurring in 2017, so if you want to learn more about what's involved, read our article on it here.

Read more about: