UK road tax 2022: VED tax rates and bands explained

We explain how the current Vehicle Excise Duty (VED) system works, what it means for UK motorists and how to check the cost of taxing your car

2021 Road Tax explained

Commonly known as ‘car tax’ or ‘road tax’, the Vehicle Excise Duty (VED) system is split into two parts. Changes to VED tax rates were introduced in April 2022, which saw increases in prices across the board in line with inflation. A new car’s tax cost can range from £0 to £2,365 in the first year depending on its CO2 emissions. All cars then move to a flat annual rate for the second year onwards.

For drivers of petrol and diesel cars registered after 1 April 2017, that flat annual rate is currently £165, and for alternatively fuelled cars (hybrid, bioethanol or LPG) the rate is £155. For cars with a list price of £40,000 or more, an extra £355 tax is applied for the first five years. Drivers of cars producing zero emissions - electric and hydrogen cars - don’t have to pay car tax, even if the list price is more than £40,000.

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We’ve listed annual and six-monthly VED charges for 2022 below. It’s worth noting, however, that if you want to pay on a monthly basis then you’ll have to pay a small additional fee.

Annual Vehicle Excise Duty

It’s rare that a year goes by without VED increasing but the increase for 2022 wasn’t too drastic. The annual flat rate of road tax for 2022 was set at £165 for petrol and diesel cars registered from April 2017.

The annual flat rate of road tax for hybrid vehicles, including mild hybrid and plug-in hybrids (PHEV), is currently £155. This is referred to as the Alternative Fuel Vehicle (AFV) rate, and it also applies to cars powered by bioethanol or LPG (liquid petroleum gas).

Calculating the tax you would pay on a brand new car can seem daunting, so the government has provided a useful car tax price checker tool.

The £40,000-plus car tax surcharge

There’s a VED surcharge payable on cars costing more than £40,000 when new, which stands at £355. This cost must be paid annually on top of the standard flat rate. This is payable for five years from the second year of registration; at six years old, the car reverts to the standard flat rate. Zero-emission cars are exempt from this charge.

2022 annual VED flat rates for cars registered after April 2017

Tax class

12 months

6 months

Petrol/diesel cars

£165

£90.75

Alternative Fuel Cars

£155

£85.25

Including £355 luxury car tax surcharge

  

Petrol/diesel cars

£520

£286

Alternative Fuel Cars

£510

£280.50

2022 first year VED rates

Car-tax rates are used as one way to incentivise the purchase of greener cars. 

The first-year rates start from £0 for zero-emission cars and AFVs that emit less than 50g/km. The most polluting cars are hit the hardest, with those emitting 255g/km of CO2 or more costing £2,365 in the first year. All other models fall somewhere between the two extremes.

Compared to the first-year rates for petrol cars and diesel cars that meet RDE2 emissions standards, AFVs are eligible for a £10 discount. Diesel cars that don’t meet RDE2 emissions (meeting this standard was mandatory from 1 Jan 2021, so only unregistered diesel cars built before this date) pay more on a sliding scale.

When you buy a new car, the first year of road tax will be included in the car’s on-the-road (OTR) price, so you don’t need to worry about paying the tax separately.

First year VED bands for cars registered after 1 April 2021

 

Petrol and RDE2 diesel cars

Non-RDE2 diesel cars

Alternative Fuel Cars

g/km CO2

12 months

12 months

12 months

0

£0

£0

£0

1-50

£10

£25

£0

51-75

£25

£120

£15

76-90

£120

£150

£110

91-100

£150

£170

£140

101-110

£170

£190

£160

111-130

£190

£230

£180

131-150

£230

£585

£220

151-170

£585

£945

£575

171-190

£945

£1,420

£935

191-225

£1,420

£2,015

£1,410

226-255

£2,015

£2,365

£2,005

Over 255

£2,365

£2,365

£2,255

How to check car tax online

The increases may have been relatively modest for the 2022 tax year but there’s no escaping the fact that some buyers face eye-watering road tax bills. That’s why it’s important to check what a prospective purchase will cost you in tax for the time you plan to own it. 

If you’re taxing a used car, the Driver and Vehicle Licensing Agency (DVLA) website allows you to check how much you need to pay by registration number, so you can avoid being caught out.

While business drivers don’t usually have to pay their own road tax, they do need to know about Benefit-in-Kind (BiK) rates. These are the figures used to calculate company-car tax and we've created a guide to how the system works.

Car tax rates for older cars

Owners of older cars continue to pay annual road tax as per the rules of the previous tax structures, albeit with a slight rise due to inflation. The previous systems were split into two separate periods; cars registered between 1 March 2001 to 31 March 2017 were taxed based on CO2 emissions, and cars registered before 1 March 2001 were taxed based on engine size.

VED rates for 2001 to 2017-registered cars

  

Petrol and diesel cars

 

Alternative Fuel Cars

 

Band

g/km CO2

12 months

6 months

12 months

6 months

A

0-100

£0

-

£0

-

B

101-110

£20

-

£10

-

C

111-120

£30

-

£20

-

D

121-130

£135

£74.25

£125

£68.75

E

131-140

£165

£90.75

£155

£85.25

F

141-150

£180

£99

£170

£93.50

G

151-165

£220

£121

£210

£115.50

H

166-175

£265

£145.75

£255

£140.25

I

176-185

£290

£159.50

£280

£154

J

186-200

£330

£181.50

£320

£176

K

201-225

£360

£198

£350

£192.50

L

226-255

£615

£338.25

£605

£332.75

M

255+

£630

£346.50

£620

£341

VED tax bands for cars registered before 1 March 2001

If your present car was registered before 1 March 2001, it falls into one of two bands based on engine size, making it easy to work out your annual bill.

If your car has an engine less than 1,549cc in capacity, it’s liable for annual VED of between £170 and £178.50. Meanwhile, if you have your sights set on an older car registered before 1 March 2001 with an engine larger than 1549cc, the cost of tax is set between £280 and £294. The same car registered after that could easily cost twice as much in tax.

Since 1 April 2017, all cars more than 40 years old are considered to be historic vehicles and so are exempt from VED.

Driving without tax

If you’re caught driving a car without road tax, you could receive a severe fine. If you’re stopped by police at the roadside, they have the power to confiscate your vehicle. You can check if your car is taxed on the DVLA’s website to make sure.

When buying a new car, you need to tax it before driving away, as there’s no ‘grace period’. You can tax a car online or by calling the DVLA, ensuring you have the logbook (V5C) or new keeper slip (V5C/2) handy so you can obtain the vehicle’s unique reference number. If you have a car you want to keep in storage and not drive, you can cancel its road tax by making a SORN (Statutory Off-Road Notification), which is valid for 12 months.

Road tax refund

The disappearance of the tax disc in 2015 brought with it a significant change; previously, if the tax disc of a car for sale hadn’t yet expired, it could be sold along with the car. With tax already in place, this made it simple for a buyer to simply arrange insurance over the phone to drive away legally in their new car.

It’s no longer possible for road tax to be transferred to a subsequent owner. Instead, it’s up to the owner to apply for a refund of any remaining tax (allow up to six weeks for it to be processed). It’s also up to the buyer to tax the car themselves immediately; you can do this online through a relatively simple process and it’s still possible to visit a Post Office to arrange your car tax.

Pay road tax online

It's now possible to pay your road tax with a monthly Direct Debit, while the annual and six-monthly payment options continue. The DVLA automatically sends out renewal reminders (called V11 forms), so remembering to tax your car is easy, despite the fact there are no longer tax discs. V11 forms also have a Direct Debit form to fill in on the back, which you can then take to a Post Office if you’d rather not pay online.

More on UK car tax...

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