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CAR TAX RATES

What are the latest rates for car tax (VED)?

From April 2017, car tax for a new car depends on its list price and CO2 band

If your car was first registered before 1 April 2017 then you'll continue to pay car tax (VED) under the familiar CO2-based system, but for new cars it all changed from 1 April 2017.

What are the car tax (VED) rules from April 2017?
  • The first year rate is based on official CO2 figures.
  • A flat standard rate of £140 applies to all cars except those with CO2 emissions of zero for which the standard rate is £0.
  • An extra charge of £310 a year applies to cars with a list price over £40,000 in the first 5 ‘standard rate years’.
  • The latest VED rules in detail
What changed in November 2017 for new diesel cars?

In the Autumn 2017 budget the Chancellor announced an increase in the first year VED rate for new diesel cars first registered after 1 April 2018.

The emissions test that Euro 6 diesel cars have to pass before they're approved for sale includes a more demanding, on-road 'Real Driving Emissions (RDE)' test from September 2017. This test is set to become even more stringent from January 2020 when 'RDE step 2' comes into force.

The CO2-based first year VED rate for new diesel cars first registered after 1 April 2018 will be one band higher than shown in the table unless the car was approved to the RDE step 2 standard.

Car tax

VED basics 

All vehicles registered in the UK and used on public roads must be taxed.

If you’re not using it, you must either let the DVLA know that your car's being kept off-road with a SORN (Statutory Off Road Notification) or continue to tax it.

  • The cost of car tax (Vehicle Excise Duty) depends on how old your vehicle is and its engine size or official CO2 emissions. Since April 2017 it depends on the car’s list price when new, too.
  • The official CO2 figure for your car is on the V5c registration document. It’s measured in official tests before a new model can be put on sale.  
  • The DVLA stopped issuing paper tax discs from 1 October 2014.

What are the current car tax rules?

The way that cars are taxed was changed dramatically from 1 April 2017. The main points are:

  • The first year rate is based on official CO2 figures.
  • A flat standard rate of £140 applies to all cars except those with CO2 emissions of zero for which the standard rate is £0.
  • An extra charge of £310 a year applies to cars with a list price over £40,000 in the first 5 ‘standard rate years’.
  • Alternative fuel cars (tax class 59) pay £10 less than the First year and standard rates below.
  • Cars first registered before 1 April 2017 continue to pay car tax under the old system.

 CO2 emissions  First year rate*  Standard rate
 0  £0  £0
 1-50  £10 £140 
 51-75  £25  £140
 76-90  £100  £140
 91-100  £120  £140
 101-110  £140  £140
 110-130  £160  £140
 131-150  £200  £140
 151-170  £500  £140
 171-190  £800  £140
 191-225  £1200  £140
 226-255  £1700  £140
 256+  £2000

 £140

Notes

* For diesel cars first registered after 1 April 2018, the CO2-based first year rate of VED will be one band higher than shown in the table unless the car was approved to the RDE step 2 standard.


Car tax for cars first registered between 1 March 2001 and 31 March 2017

Your car will fall into one of a series of bands based on official CO2 emissions.

There’s a different rate for brand new cars for the first year – this ‘showroom tax’ was introduced in 2010. The cost then changes to the standard rate from the second year.

 VED Band

 CO2

Emissions (g/km)

2015/2016

First year rate²

20125/16

standard rate¹

2016/2017

First year rate²

 2016/17

Standard rate¹

 2017/18

Standard rate¹

 A  up to 100  0  0  0  0  0
 B  101-110  0  £20  0  £20  £20
 C  111-120  0  £30  0  £30  £30
 D  121-130  0  £110  0  £110  £115
 E  131-140  £130  £130  £130  £130  £135
 F  141-150  £145  £145  £145  £145  £150
 G  151-165  £180  £180  £185  £185  £190
 H  166-175  £295  £205  £300  £210  £220
 I  176-185  £350  £225  £355  £230  £240
 J  186-200  £490  £265  £500  £270  £280
   201-225  £640  £290  £650  £295  £305
 L  226-255  £870  £490  £885  £500  £520
 M  over 255  £1100  £505  £1120  £515  £535

Notes

1 12-month non-direct debit rate and single 12-month payment direct debit rate. Alternative fuel car (tax class 59) discounts are: 2015/16 £10 all cars, 2016/17 £10 all cars 2017/18 £10 all cars

2 Includes cars releasing over 225g/km and first registered between 1 March 2001 and 23 March 2006.


Car tax for cars first registered before 1 March 2001

Car tax is based on engine size, as official CO2 data wasn’t generally available. So, if the engine is:

  • 1549cc or smaller:  £150 a year (2017/18 rate)
  • Bigger than 1549cc: £245 a year (2017/18 rate)

Historic vehicle exemption

Cars built more than 40 years ago will be automatically exempt from paying car tax, from 1 January 2017.

Before 2017 registered keepers had to apply for car tax based on historic class.

Car tax or road tax?

Cars started being taxed in 1920 as local councils had to start registering all vehicles. It was called Vehicle Excise Duty (VED) and was based on horsepower. Tax discs were later introduced in 1921.

This new tax was initially used for building and maintaining roads. As it was paid directly into the ‘road fund’ it was known as the Road Fund Licence or road tax. 

In 1936, road works were being paid for by government grants. As the road fund wasn’t needed any more, it was abolished in 1955. So while it might have been right to refer to it as road tax or the Road Fund Licence before 1936, this hasn’t been the case since.

End of the road for the tax disc

One of the biggest changes in DVLA history was the abolition of the 93-year-old tax disc, on 1 October 2014.

Also, the DVLA now issues automatic refunds on car tax – for any full months left – to the registered keeper when a vehicle is sold, scrapped or a Statutory Off Road Notification (SORN) is made. In the past, you could transfer car tax from your old vehicle to the new one.

5 December 2017

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