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Car Road Tax Rates Explained

Car Road Tax Rates Explained

Published 4 July 2022

 

This article will cover:

  • what is car road tax?
  • how is car road tax calculated?
  • what are the road tax changes for 2022?
  • road tax for cars registered on or after 1 April 2017
  • road tax for cars registered between 1 March 2001 and 31 March 2017
  • road tax for cars registered before 1 March 2001
  • vehicles exempt from road tax
  • who is responsible for taxing a leased vehicle?
  • how to check if a vehicle is taxed

 

What is Car Road Tax?

Vehicle Excise Duty (VED), more commonly known as car tax or road tax is an annual tax paid by anyone with a motor vehicle used on UK roads.  There are different rates of car tax known as car tax bands, road tax bands or VED bands.  Generally, the more CO2 your car emits, the more you pay.

Every year, on the 1st April the vehicle excise duty (VED), increases with inflation.

Road tax is enforced by the DVLA, and drivers who fail to pay could receive a fine of up to £1,000.

 

How is Car Road Tax Calculated?

Currently, the Vehicle Excise Duty (VED) system is split into two parts:

  • First-year rate – A one-off rate charged in the car’s first year. This is typically included in the car’s on-the-road (OTR) price.
  • Standard rate  – A flat annual rate charged from the second year onwards.

The road tax rate you will be charged in the first year and subsequent standard rate years depends on several factors.

Factors That Impact Road Tax:

year of registration

The rate of road tax you will pay varies depending on when the car was registered.
Currently, the UK Government has three tiers:

  1. Cars registered on or after 1 April 2017.
  2. Cars registered between 1 March 2001 and 31 March 2017
  3. Cars registered before 1 March 2001

engine size

Cars registered before 1 March 2001 are charged based on engine size. Cars with an engine over 1549cc are charged at a higher annual rate than those with a smaller engine.

fuel type

For cars registered between 1 March 2001 and 31 March 2017, the vehicle tax rate is based on fuel type and CO2 emissions. The fuel type of the vehicle also affects new cars as alternatively fuelled vehicles, including hybrids, bioethanol and liquid petroleum gas, get a reduction to the Standard rate.

CO2 emissions

You’ll pay a rate based on a vehicle’s CO2 emissions the first time it’s registered. Cars with zero emissions pay nothing in their first year and a flat rate following that. High emission vehicles will pay a much higher rate.   Find your car’s emissions.

value of the vehicle

For cars purchased after 1 April 2017 that cost more than £40,000, there is also an additional premium rate tax on top of the standard rate.

 

What Are The Road Tax Changes for 2022?

In October 2021, UK Chancellor Rishi Sunak announced in his Autumn Budget several changes to the road tax (VED) system, which come into place from 1 April 2022, including:

  • First-year tax rates will increase by £5 to £120 for most vehicles
  • Standard road tax rates from the second year onwards, for vehicles registered after 2017 will increase by 6%, in line with the Retail Prices Index (RPI). This means most petrol and diesel vehicles will pay an extra £10 on their road tax, rising from £155 to £165. The only exceptions are zero-emissions vehicles such as electric cars, which qualify for a £0 tax rate.
  • Premium tax rates for new cars over £40,000 will increase by £30 per year

 

Road Tax For Cars Registered On Or After 1 April 2017

  1. You need to pay tax when the vehicle is first registered, this covers the vehicle for 12 months.
  2. You’ll then pay vehicle tax every 6 or 12 months at a different rate.

1. First Tax Payment When You Register The Vehicle

You’ll pay a rate based on a vehicle’s CO2 emissions the first time it’s registered.

You have to pay a higher rate for diesel cars that do not meet the Real Driving Emissions 2 (RDE2) standard for nitrogen oxide emissions. You can ask your car’s manufacturer if your car meets the RDE2 standard.

2.Vehicles With A List Price of £40,000 Or More

From 1 April 2022, the additional premium tax rate will increase by £30, jumping from £335 to £355. This is paid for five years (from the second time the vehicle is taxed) on top of the standard rate.

This means petrol or diesel cars will pay a £520 in standard rate tax, irrelevant of their CO2 emissions.

Alternatively fuelled vehicles, such as hybrids and liquid petroleum gas, will pay £155 per annum.  Zero-emission cars are exempt from this charge.

 

These are the VED rates for cars registered on or after 1 April 2017. Cost is first payment.

CO2 emissions (g/km) Diesel cars (TC49) that meet the RDE2
standard and petrol cars (TC48)
All other diesel cars (TC49) Alternative fuel cars (TC59)
0 £0 £0 £0
1 – 50 £10 £25 £0
51 – 75 £25 £110 £15
76 – 90 £115 £140 £105
91 – 100 £140 £160 £130
101 – 110 £160 £180 £150
111 – 130 £180 £220 £170
131 – 150 £220 £555 £210
151 – 170 £555 £895 £545
171 – 190 £895 £1,345 £885
191 – 225 £1,345 £1,910 £1,335
226 – 255 £1,910 £2,245 £1,900
Over 255 £2,245 £2,245 £2,235

 

Annual renewal for cars registered between on or after 1 April 2017 (second tax payment onward)
Fuel type Single 12 month payment
Petrol or diesel £155
Electric £0
Alternative £145

 

(Alternative fuel vehicles include liquid petroleum gas, hybrids and bioethanol powered)

 

 

 

Road Tax For Cars registered between 1 March 2001 and 31 March 2017

Drivers of older cars registered between 1 March 2001 and 31 March 2017 will continue to pay annual road tax  based on fuel type and CO2 emissions, but with a slight increase of between £5 to £30 due to inflation.

Band CO2 emission (g/km) Petrol car (TC48) and diesel car (TC49)

(Single 12 month payment)

Alternative fuel cars (TC59)

(Single 12 month payment)

A Up to 100 £0 £0
B 101 – 110 £20 £10
C 111 – 120 £30 £20
D 121 – 130 £130 £120
E 131 – 140 £155 £145
F 141 – 150 £170 £160
G 151 – 165 £210 £200
H 166 – 175 £250 £240
I 176 – 185 £275 £265
J 186 – 200 £315 £305
K 201 – 225 £340 £330
L 226 – 255 £585 £575
M Over 255 £600 £590

 

 

Road Tax For Cars Registered Before 1 March 2001

The rate of vehicle tax is based on engine size.

Private or light goods (TC11)
Engine size (cc)
Single 12 month payment
1549 and below £170
Above 1549 £280

 

Vehicles Exempt From Road Tax

Some types of vehicle are ‘exempt’ from vehicle tax. Do not be confused by the term exempt – it means you still have to tax your vehicle, but that it does not cost you anything.

 

historic vehicles

Vehicles made before 1 January 1982 are exempt.

electric vehicles

The electricity must come from an external source or an electric storage battery not connected to any source of power when the vehicle is moving to be exempt.

vehicles used by a disabled person

You can claim disability exemption when you apply for vehicle tax.

disabled passenger vehicles

Vehicles (apart from ambulances) used by organisations providing transport for disabled people are exempt.

 

Who Is Responsible For Taxing A Leased Vehicle?

If you currently lease your vehicle on a contract hire or personal contract hire agreement, the finance provider is responsible for providing the vehicle tax for the duration of the agreement.

 

How To Check If A Car Is Taxed

There is a government website that allows you to check the vehicle tax on a car just by typing in the registration.

 

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