► Updated car tax for new models
► How vehicle excise duty (VED) works
► 2025 road and car tax bands explained
Only two things in life are certain: death and car tax. It’s a modern reality that motoring isn’t free – and in this guide we explain how Vehicle Excise Duty (VED), also known as car tax and road tax, works.
It’s now been a decade since the physical tax discs were discontinued, made digital in a measure to chop down on government spending. VED is still just as strong, and the recent autumn budget has shaken things up substantially. Gone is free road tax for electric vehicles, and anything that contributes any CO2 at all is now facing a substantial price hike.
Read on to learn all about the changes, and just how VED is working.
How does car tax work?
Cars in Great Britain are taxed based on their CO2 emissions, but the age of the car is also taken into consideration when the VED car tax band is calculated. And there is also a difference between taxing a brand new car being registered for the first time (known as showroom tax) and one that’s already on the road.
In this guide we will attempt to explain all the most likely road tax scenarios. First step is to establish your vehicle’s age and CO2 emissions; both are recorded on your car’s V5C registration document from the DVLA – it’s the paperwork you were sent when you first purchased it. Carbon dioxide emissions are quoted in grammes per kilometre (g/km) and record how efficient your vehicle is.
It can get a bit complicated, here we explain how much you’ll pay whether you’re taxing a brand new car, a nearly new one or an old banger. Read on for our full explainer for how car tax works.
First-year road tax VED for all new cars
If you are buying a brand new car from April 2025, you’ll pay the new First Year Rates of VED. These very from a tenner for EVs, all the way up to £5,490 for an uber-polluting Lamborghini Revuelto or Rolls Royce Phantom. EVs used to get a free ride, that’s all ending now as incentives begin to be diluted as acceptance grows.
Find out your vehicle’s CO2 emissions in the first column and then read across, depending on whether your car is powered by petrol, diesel or alternative fuels (LPG or CNG autogas).
| CO2 (g/km) | Diesel cars (TC49) that meet RDE2 standard and petrol cars (TC48) | All other diesel cars (TC49) | Alternative fuel cars (TC59) |
| 0 | £10 | £10 | £10 |
| 1- 50 | £110 | £110 | £110 |
| 51 – 75 | £130 | £130 | £130 |
| 76 – 90 | £270 | £350 | £250 |
| 91 – 100 | £350 | £390 | £330 |
| 101 – 110 | £390 | £440 | £370 |
| 111 – 130 | £440 | £540 | £420 |
| 131 – 150 | £540 | £1,360 | £520 |
| 151 – 170 | £1,360 | £2,190 | £1,340 |
| 171 – 190 | £2,190 | £3,300 | £2,170 |
| 191 – 255 | £3,300 | £4,680 | £3,280 |
| 226 – 255 | £4,680 | £5,490 | £4,660 |
| Over 255 | £5,490 | £5,490 | £5,490 |
That’s the first-year cost. Then it gets even more complicated! Road tax in subsequent years is charged at a different rate – depending on the original list price of your car. You have been warned…
Car tax for new cars: second and subsequent years
Ready to consider your second-year tax on a new car? Good. Check out our table to see what you’ll pay – and remember, this only applies if your new car cost less than £40,000 when you first purchased it. These are thee current rates but will rise with inflation in April 2025:
| Tax Class | Non Direct Debit (12 month) | 6 month | Direct Debit (12 month) | Total payable
by 12 monthly
instalments | Single
6 month
payment |
| Petrol/diesel | £190 | £104.50 | £190 | £199.50 | £99.75 |
| Alternative fuel | £180 | £99 | £180 | £189 | £94.50 |
| Total including the £410 additional rate | | | | | |
| Petrol/diesel car | £600 | £330 | £600 | £630 | £315 |
| Alternative fuel car | £590 | £324.50 | £590 | £619.50 | £309.75 |
What’s all this about new cars costing more than £40,000 paying more road tax?
Ah yes. Bit of a killer this one: if your new car has a list price (including options and extras) of more than £40,000 at the time of purchase, you’ll have to pay even more. And you can’t haggle it down – the tax is charged on the quoted list price of your chosen model, including all optional equipment. This figure has been frozen since its introduction, and the recent inflation jump now means a mid-spec Vauxhall Astra PHEV can count as a luxury car. Again, EVs were exempt from this, but will now pay the supplement from April 2025.
These rates apply in years two, three, four and five – so you’ll have to pay an extra £410 a year:
VEHICLE
FUEL
TYPE | ONE-OFF
ANNUAL
PAYMENT | ONE-OFF
ANNUAL
DIRECT DEBIT
| TOTAL OF
12 MONTHLY
DIRECT DEBITS | ONE-OFF
6-MONTH
PAYMENT | SINGLE
6-MONTH
DIRECT DEBIT |
| Petrol or diesel | £450 | £450 | £472.50 | £247.50 | £236.25 |
| Electric | £310 | £310 | £325.50 | £170.50 | £162.75 |
| Alternative fuel | £440 | £440 | £462 | £242 | £231 |
Car tax and VED for cars registered between 1 March 2001 and 31 March 2017
Still with us? Good. Any car registered between 2001 and 2017 will pay a flat rate of VED car tax, depending on its CO2 emissions – price doesn’t come in to it. The cleanest cars in Band A paid nothing, whereas the dirtiest in Band M were clocking up over £700 a year. So check out the table below to see how much your car tax will be:
| Car tax band | CO2
emissions | One-off annual payment | One-off 6 month payment | Total of
12 monthly
direct debit | Total payable
by 12 monthly
installments | Single
6 month
payment |
|---|
| A | Up to 100 | £0 | £0 | – | – | – |
| B | 101 to 110 | £20 | £20 | £21 | – | – |
| C | 111 to 120 | £35 | £35 | £36.75 | – | – |
| D | 121 to 130 | £160 | £88 | £160 | £168 | £84 |
| E | 131 to 140 | £190 | £104.50 | £190 | £199.50 | £99.75 |
| F | 141 to 150 | £210 | £115.50 | £210 | £220.50 | £110.25 |
| G | 151 to 165 | £255 | £140.25 | £255 | £267.75 | £133.88 |
| H | 166 to 175 | £305 | £167.75 | £305 | £320.25 | £160.13 |
| I | 176 to 185 | £335 | £184.25 | £335 | £351.75 | £175.88 |
| J | 186 to 200 | £385 | £211.75 | £385 | £404.25 | £202.13 |
| K* | 201 to 225 | £415 | £228.25 | £415 | £435.75 | £217.88 |
| L | 226 to 255 | £710 | £390.50 | £710 | £745.50 | £372.75 |
| M | Over 255 | £735 | £404.25 | £735 | £771.75 | £385.88 |
So taxing some older, interesting cars such as a secondhand Porsche 911 could get pricey…
Car tax and VED for older cars registered before 1 March 2001
Ah the good, old-fashioned way. Road tax was calculated purely on engine size – and the magic cubic capacity was 1.5 litres. Check out our table here to see how much an older car will cost to tax (conveniently, this was introduced just as the UK’s new registration system was ushered in, with the Y-reg plate).
ENGINE
SIZE
IN CC | ONE-OFF
ANNUAL
PAYMENT | ONE-OFF
ANNUAL
DIRECT DEBIT
| TOTAL OF
12 MONTHLY
DIRECT DEBITS | ONE-OFF
6-MONTH
PAYMENT | SINGLE
6-MONTH
DIRECT DEBIT |
| Below 1549 | £210 | £210 | £220.50 | £115.50 | £110.25
|
| Above 1549 | £345 | £345 | £362.25 | £189.75 | £181.13 |
And that’s it. Complicated, isn’t it? We hope you’ve found that useful. Read on for some popular questions about road tax and VED.
Car tax FAQs
Has my car got tax?
You can check if your vehicle is taxed and can be driven on the road on this handy DVLA online service here: https://www.gov.uk/check-vehicle-tax
How do I cancel my car tax?
It’s very easy to cancel your VED. If you pay by Direct Debit, it will be cancelled automatically; if you paid a one-off fee, the DVLA will automatically refund any full months left to run on your car tax. Apply for a tax refund here.
Is car tax transferable?
Sadly not. You used to be able to pass your VED on to the next buyer when you sold your car. But this was stopped in 2017. You must now apply for a refund – and the buyer will have to tax the car from scratch.
How do I SORN my car?
If you know you won’t be driving your car on the road for a considerable length of time, you must apply for a Statutory Off Road Notification or SORN if you don’t want to pay road tax. We have a separate explainer here about how SORN works.
How do I contact the DVLA about my car tax?
The Driver and Vehicle Licensing Agency (DVLA) is the government body responsible for car and road tax in the UK. Their website is here and all their contact details are listed there.
How is company car tax calculated?
Company car tax is a completely separate tax, designed to reflect the perk of having a company-provided business car. We recommend using the company car tax calculator on our sister website Parkers.co.uk to see how much tax you’ll pay on any car.
Do you have to pay tax on older classic cars?
Cars made before before 1 January 1984 are exempt from paying VED, as of November 2024. This advances every year, so all cars made before 1 January 1985 will be exempt from 1 January 2025. You need to apply for it, and can do that here.
Other exemptions include disabled people, mowers, agricultural vehicles doing less than 1.5km on road between fields, and steam engines.