Everything You Need to Know About Car Tax: Car Tax Bands Explained

Everything You Need to Know About Car Tax: Car Tax Bands Explained

Understanding the different car tax bands can be confusing – but it doesn’t have to be.

Road tax, also known as VED (Vehicle Excise Duty), is constantly changing and it can be hard to keep up with. To make matters even more confusing, the cost of road tax is automatically adjusted by the government in line with inflation.

But we're here to help. Learn everything you need to know about car tax, the different bands, and the current rates introduced on 1st April 2024.

How much is car tax?

The amount of car tax you pay will depend on a few different factors. This includes the registration year and the amount of CO2 emissions produced by the car. However, road tax for cars registered before 1st March 2001 is based on engine size.

UK car tax bands

In the UK, car tax bands have changed significantly over the years. We’ve broken down the different types of car tax bands for different registration years below.

Cars registered before 1st March 2001

The government classes any vehicles registered before 1st March 2001 as Private/Light Goods (PLG) vehicles. Cars are split into two categories based on engine size – not over 1549cc and over 1549cc.

Cars registered after March 2001 and before April 2017

There are 13 different road tax bands for cars registered after March 2001 and before April 2017.

This is based on the amount of CO2 emissions the vehicle produces – the lower the emissions, the lower the tax band.

Any cars that produce less than 100g/km of CO2 emissions pay no road tax. But new rules will introduce an annual rate for these cars from 2025.

Cars registered after April 2017

Cars registered from 1st April 2017 follow a slightly different system. This is because the UK Government introduced three new road tax bands - zero, standard and premium.

Any cars registered before April 2017 still fall into the previous VED band system.

During the first year of registration cars are required to pay a higher rate also known as the ‘showroom tax’. However, from the second year, a flat rate of £190 is applied to all cars regardless of their emissions.

Electric cars are currently exempt from paying road tax. But this is set to change in 2025 when they will be charged the first-year showroom tax and then the standard rate.

While any new cars priced over £40,000 are subject to a premium car tax fee. This is currently an additional £410 for the first five years of registration after which the standard rate is applied.

How do you tax a car?

You have a few options when it comes to paying road tax, with the easiest option being via the government website.

You’ll need to have a reference number which can found on:

• Previous vehicle tax reminder or last chance letters from the DVLA
• Your vehicle log book (V5C) which must be in your name
• The green ‘new keeper’ slip from a log book if you’ve just bought your car

Payment can be made via debit, credit card, or you can set up a direct debit. If you prefer, you can also call the DVLA vehicle tax service and pay over the phone. You can also visit your local Post Office to tax your car.

If you are buying a new car, the dealership will usually arrange road tax for you. But it’s your responsibility to take out insurance before you can drive the car.

Are any cars exempt from paying road tax?

There are a range of vehicles that are exempt from paying any road tax. These include:

• Vehicles used by a disabled person (you will need to claim disability exemption and it can only be used on one vehicle at a time)
• Passenger vehicles used by organisations to provide transport for disabled people (excluding ambulances).
• Vehicles made before 1st January 1984
• Motability vehicles and powered wheelchairs (maximum speed of 8mph on the road on 4mph on pathways)
• Electric vehicles (excluding hybrid electric vehicles)
• Steam-powered vehicles
• Tractors, agricultural engines, and light agricultural vehicles used off road
• Vehicles registered as off the road

For further information, visit https://www.gov.uk/vehicle-exempt-from-vehicle-tax

What happens if you don’t tax your vehicle?

It’s illegal to drive an untaxed vehicle on the road and you could be fined up to £2,500, unless your vehicle falls into the exemption criteria.

You can however drive an untaxed vehicle to a pre-arranged MOT test. But only to and from the test as anywhere else could lead to a fine.

If your vehicle is off the road (e.g. being stored in a garage and not driven), it’s important to declare this to avoid any fines. Any vehicles parked on a public road must be taxed and insured.

Your local car guide

At Bristol Street Motors, we’re here to help you beyond just buying a new or used car. That’s why we keep you informed on important information on everything from car tax, to MOTs, and car insurance.

Now you’re clued up on road tax, visit your local Bristol Street Motors dealership and discover your perfect car.

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