Car tax rates 2024: VED explained and how to tax my car

Knowing how to tax your car is an important part of car ownership in the UK, but the system isn’t entirely straightforward. Vehicle Excise Duty (VED) varies from car to car, taking into account its age, fuel type, emissions among other factors. All drivers must pay VED or risk facing a large fine, although there are some scenarios where road tax is free. 

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In this guide, we’ll explain how to check if your car is taxed, as well as how much you need to pay and how to pay. We’ve listed annual and six-monthly VED charges for 2024 below. It’s worth noting, however, that if you want to pay on a monthly basis via Direct Debit then you’ll have to pay a small additional fee.

What is annual Vehicle Excise Duty (VED)?

Commonly known as ‘car tax’ or ‘road tax’, the Vehicle Excise Duty (VED) system is used to tax all cars in the UK. It’s quoted as a yearly fee that can be paid once a year, every six months, or on a monthly basis. There are different VED rules based on the age of your car. Here are the key points to remember:

• All petrol and diesel cars registered from 1 April 2017 pay a flat annual VED rate of £190 (reduced to £180 for alternative fuel cars, £0 for EVs).
• Cars registered between 1 March 2001 and 31 March 2017 are taxed based on CO2 emissions.
• Cars registered before 1 March 2001 are taxed based on engine size.
• Brand new cars pay a ‘first year’ VED rate when first registered instead of the flat rate, based on CO2 emissions. The flat annual rate is paid from the second year onwards.
• New cars with a list price of over £40,000 require a VED surcharge for five years, from the second year onwards.
• Historic cars over 40 years old are exempt from VED.

VED rates usually increase year-on-year with inflation – the next rise is due in April 2025.

How much is Vehicle Excise Duty (VED) for cars registered after 1 April 2017?

For drivers of petrol and diesel cars registered from 1 April 2017, the flat annual rate is currently £190. If your car is powered by an alternative fuel, including mild-hybrids, hybrids, plug-in hybrids, bioethanol or liquid petroleum gas (LPG), the rate is discounted to £180. Electric cars are currently exempt from VED.
 

What are the first year VED rates 2024?

First year VED rates only apply to those buying a brand new car. It is higher than the annual flat rate, but it is only paid once. The following year, VED follows the regular flat annual rate.

The first year VED rate is based on the vehicle’s CO2 emissions; therefore EVs are exempt. It’s worth noting that while a first-year rate of more than £2,500 might sound like a lot, this cost is factored into the car’s ‘on the road’ (OTR) price, which includes registration fees, number plates, and delivery costs.

Compared to the first-year rates for petrol cars and diesel cars that meet the latest RDE2 emissions standards, alternative-fuel vehicles are eligible for a £10 discount.

How much is the £40,000-plus new car tax surcharge?

There’s a VED surcharge payable on cars with a ’list price’ of £40,000 and over when new, which stands at £410. 

As with any new car, the first year VED rate applies (see above). From the second year onwards, the £40,000-plus surcharge is paid on top of the annual 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 until 2025.

What are the VED rates for 2001 to 2017-registered cars?

Cars first registered between 1 March 2001 and 31 March 2017 are taxed according to their CO2 emissions. The system is different for cars registered before this period – we have covered these vehicles later on.

Zero and low emissions cars are in band A, which is currently free. In 2025 these cars will move to band B, which currently costs £20 per year.

What are the VED rates for cars registered before 1 March 2001?

If your car was registered before 1 March 2001, it is taxed according to the size of its engine. 

If your car was built before 1 January 1984, it is eligible for ‘historic’ vehicle tax exemption. You must apply for the exemption, which can be done online via the Government website. 

If you plan to buy a used car, it’s worth considering its age and VED rate. A car registered in April 2001 could cost twice as much to tax compared to the same car registered in February 2001.

How do I check which band my car sits in?

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. Simply input the car’s CO2 emissions figure, its fuel type and list price and it will calculate how much VED you’re required to pay.

If you’re taxing a used car, the Driver and Vehicle Licensing Agency (DVLA) website allows you to input the car’s registration number to find out its CO2 emissions. If the car was registered between March 2001 and 1 April 2017, you can use this value to work out which band the car belongs to by checking the table above.

If your car was registered before 1 March 2001, you will need to know its engine size. Refer to your car’s handbook for this information, and then use the table above to find out its VED rate.

While business drivers don’t usually have to pay their own road tax, they do need to know about Benefit-in-Kind (BiK) rates. BiK is the reason electric and plug-in hybrid cars are so popular for business users; these are the figures used to calculate company-car tax and we've created a guide to how the system works.

Can I drive without road 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 used car, VED is not carried over from the previous owner. You need to tax it immediately before driving away, as there’s no ‘grace period’. You can tax a car instantly 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.

Who is exempt from road tax?

Aside from drivers with ‘historic’ cars over 40 years old, there are certain scenarios where you may not have to pay VED.

If you are disabled, you may be eligible for a road tax exemption. Visit the Government website to find out specific details and eligibility criteria. The car must be registered in the disabled person’s name or their nominated driver’s name. It’s important to note that this exemption can only be used on one car at a time.

How do I claim a 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.

How do I pay road tax online?

To tax your car online, visit the ‘tax your vehicle’ page on the Government website. You will need a reference number from either your vehicle logbook (V5C), vehicle tax reminder letter (V11) or the green ‘new keeper’ slip if you’ve just purchased a used car.

It's now possible to pay your road tax with a monthly Direct Debit, though doing so will cost slightly more than paying upfront. The annual and six-monthly payment options continue, again for a small extra charge. 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.

Planned changes for car tax in 2025 onwards

From 1 April 2025, the UK Government has planned to remove some of the tax incentives currently available for electric and alternative fuel cars.

Zero emission vehicles

Electric and hydrogen cars are currently exempt from paying road tax, however, as of 2025 any car registered from 1 April 2017 to 31 March 2025 will pay standard annual rates of road tax – currently £190 per year. New cars sold from 1 April 2025 will incur the lowest rate of VED in the first year (currently £10), rising to the annual flat rate in the second year. 

EVs costing over £40,000 will lose their surcharge exemption in 2025, as well. Owners will have to pay an additional £410 per year from the second year through to the sixth.

Hybrid vehicles

Cars emitting between 1 to 50 g/km will only need to pay £10 for the first year of road tax when registered but will then transition to the standard rate of £180 a year. Vehicles costing £40,000 or more will also need to pay the £390 a year uplift between the second to sixth years on the road.

More on UK car tax...

• How much tax will you pay on your new car?
• How to cancel road tax and get a refund
• Classic car tax exemption
• Company-car tax explained
• Electric company car tax explained
• Double cab pick-up tax explained
• How to SORN a car