2025 UK car tax bands: a guide to VED road tax

Updated: 01 January 2025

► 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 in 2025.

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 a major source of revenue to the UK Treasury and the recent autumn 2024 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 in annual road tax.

Read on to learn all about the changes, and just how VED works in 2025.

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 or first registration fee) and one that’s already on the road.

UK car tax and VED is set by the Chancellor in the Budget

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 the car. 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 in Britain.

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 £5490 for a high-polluting Lamborghini Revuelto or Rolls-Royce Phantom. EVs used to get a free ride, but that’s all ending now as incentives are being diluted since adoption is growing.

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). If you’re reading this on your phone, you might need to flip your screen to horizontal landscape.

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£1360£520
151 – 170£1360£2190£1340
171 – 190£2190£3300£2170
191 – 255£3300£4680£3280
226 – 255 £4680£5490 £4660
Over 255  £5490£5490£5490

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 below 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. That’s the full RRP list price, not a haggled, discounted price.

There are thee current rates of road tax, but remember these will rise with inflation from April 2025:

TAX CLASSNON DIRECT DEBIT (12 MONTHS)6 MONTHSDIRECT DEBIT (12 MONTHS)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

Diesel, petrol or electric: your fuel choice decides your car and VED road tax in the UK

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 used to be exempt from this threshold, 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 bandCO2 
emissions
One-off annual payment One-off 6 month paymentTotal of
12 monthly

direct debit
Total payable
by 12 monthly
installments
Single
6 month
payment
AUp to 100£0£0
B101 to 110£20£20£21
C111 to 120£35£35£36.75
D121 to 130£160£88£160£168£84
E131 to 140£190£104.50£190£199.50£99.75
F141 to 150£210£115.50£210£220.50£110.25
G151 to 165£255£140.25£255£267.75£133.88
H166 to 175£305£167.75£305£320.25£160.13
I176 to 185£335£184.25£335£351.75£175.88
J186 to 200£385£211.75£385£404.25£202.13
K*201 to 225£415£228.25£415£435.75£217.88
L226 to 255£710£390.50£710£745.50£372.75
MOver 255£735£404.25£735£771.75£385.88

So taxing some older, interesting cars such as a secondhand Porsche 911 could get pricey…

Porsche 997 road tax: check the CO2 and the year of first registration

Car tax and VED for older cars registered before 1 March 2001

Ah, the good, old-fashioned way to tax your car. Back in the day, 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 our guide to British car tax 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 sell your car. 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. Gone are the days of throwing in ‘six months road tax included’ to sweeten a secondhand car sale.

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. Its website is here and 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 benefit-in-kind tax you’ll pay on any fleet car. 

Do you have to pay tax on older classic cars?

Cars made before before 1 January 1985 are currently exempt from paying VED, as of 1 January 2025. This advances every year, so all cars made before 1 January 1986 will be exempt from 1 January 2026. You need to apply for this exemption, and can do that here.

Other exemptions include disabled motorists, mowers, agricultural vehicles doing less than 1.5km on road between fields, and steam engines.

By Ryan Gilmore

Deputy commercial content editor looking after product testing for CAR and Parkers, veteran car detailer and double bucket enthusiast

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