The UK’s CO2 emissions-based VED car tax bands explained – plus road tax changes for 2017
Road tax is one of the many costs induced by running a car in the UK, and figuring which cars qualify for which tariffs can on occasion be less than straightforward. Although it’s known officially as VED (Vehicle Excise Duty), the majority of people know it as road tax: the name used back in the days when any money collected from motorists was spent solely on constructing and maintaining the country’s roads.
Like it or lump it, VED isn’t going to disappear any time soon and must be paid if you own and drive a car in the UK. You are liable for road tax as soon as you take ownership of a vehicle, and it will qualify for a special ‘first year’ rate of tax if it’s a brand new machine as well. That’s why it’s entirely sensible to check how much tax a car will incur before you buy it, so there’s no chance of any nasty surprises when it comes to stumping up the cash to the DVLA.
To help you navigate the current UK road tax system, we’ve compiled the following guide for when you’re next in the market for a new or used car. It’s not a road tax calculator, because car tax rates are set in predetermined bands based on your car’s CO2 emission levels. So if you know the key g/km figure emanating from the tailpipe (as defined by the manufacturer), then you’ll know pretty much straight away how much you need to pay. And if you buy the right car, you might not have to make any road tax contributions at all, although a change to the VED regulations in April 2017 will restrict this perk to electric vehicles only.
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For cars registered before March 2001 the picture is much clearer, as cars built before then are taxed based on their engine size. Anything with a capacity below 1,549cc pays £145, while anything above pays £230.
The incoming changes to the VED system are now imminent, and you can get up to speed with the new measures by reading this handy guide…
Tax bands for cars registered after March 2001
If your car was registered on or after March 1st 2001, the rates are split into car tax bands depending on the carbon dioxide (CO2) emissions of the vehicle. These emissions are measured by how many grams are emitted from the exhaust for every kilometre travelled (g/km). These rates are subject to change with inflation – the most recent ones are detailed below, and have risen about £10 versus the previous rates.
In simple terms, the lower the car’s emissions, the lower the vehicle tax band and the less you pay. There are two elements to tax rates, though. There’s a main tax rate and a first year rate which can be more or less than the normal rate payable on new cars for the first 12 months of ownership.
• Car tax: everything you need to know
In some cases, the first year will cost you nothing in tax, but the following year could land you with a higher rate, depending on the car’s emissions. There are also separate tax bands for alternative fuel vehicles, motorcycles and commercial vehicles. Some special ‘green’ cars, including hybrids and LPG cars, recieve a nominal £10 per year discount on vehicle tax.
Our table below shows the standard rates of vehicle tax for cars registered on or after 1st March 2001 – you can calculate the tax rate for your car from this.
Current vehicle VED tax bands: table
VED Band CO2 Emissions Annual rate First year rate
A Up to 100 g/km £0 £0
B 101-110 g/km £20 £0
C 111-120 g/km £30 £0
D 121-130 g/km £110 £0
E 131-140 g/km £130 £130
F 141-150 g/km £145 £145
G 151-165 g/km £185 £185
H 166-175 g/km £210 £300
I 176-185 g/km £230 £355
J 186-200 g/km £270 £500
K* 201-225 g/km £295 £650
L 226-255 g/km £500 £885
M Over 255 g/km £515 £1,120
Tax bands for cars registered after April 2017
The July 8 2015 revisions to the car tax system by George Osborne will continue to tax new vehicles by their CO2 emissions, but at new rates from 2017 onwards. The VED scheme was revised for 2017 to account for the growing number of tax-exempt cars being purchased.
The new VED bands will apply to all cars registered from 1 April 2017 onwards. A CO2 based rate will still mandate the first year fee – but only zero emissions vehicles will be exempt from the tax. Cars registered before April 1st 2017 will continue to be taxed under the old system.
After the first year, a flat fee of £140 applies for all vehicles not categorised as zero emissions, although alternative fuel vehicles get a slightly cheaper fee, at £130. The revenue from the revised VED scheme will flow into a new road fund for road repairs and maintenance.
In addition cars with a list price above £40,000 will be required to pay an extra £310 every year for the first five years. That means electric cars over £40k will pay £310, alternative fuel vehicles will pay £440, and petrol or diesel cars will pay £450. After five years, these rates change to zero, £130 and £140 respectively.
VED tax bands: April 2017 onwards: table
VED car tax bands for cars first registered from 2017 onwards
Emissions (g/km of CO2) First year rate Standard rate
0 £0 £0
1-50 £10 £140
(£130 for vehicles using an alternative fuel source: hybrids, plug-ins, bioethanol and LPG)
Over 255 £2,000
All cars above £40,000 pay £310 annual supplement for five years