How much is car tax: VED rates explained

There's an old saying which states that nothing in life is certain except death and taxes – and while we're not specialists on the former, we can certainly tell you everything you need to know about car tax bands.

Most buyers of new and used cars will need to pay Vehicle Excise Duty (VED) – often referred to as road tax. The costs usually rise every April, with increases generally calculated in line with inflation based on the Retail Price Index (RPI). For the most recent tax rise, in 2024, these equated to an increase of around 6%.

Electric car road tax: EVs to lose their exemption in 2025

There are some significant changes due to happen from 1 April 2025. From this time, EVs will lose their exemption from VED, and buyers will have to pay the next lowest first-year rate, which is currently £10. While that’s not too much of a hit financially, the cost will rise sharply in the following years.

From the second year of a car’s life, EV owners will have to pay the standard rate of VED, which is currently £190 and will increase in April 2025.

On top of this, buyers of EVs costing more than £40,000 when new will be liable for the extra annual fee for years two to six that's payable for more expensive new cars. This is currently £390 a year, but is also likely to have increased by 2025. 

This means the total VED bill for the first three years of EV ownership will be £390 for a car with a total list price below £40,000, rising to £1170 for cars costing more than £40,000. 

Used EV owners will also have to start paying VED for the first time from April 2025: zero emission cars first registered between 1 April 2017 and 31 March 2025 will be eligible for the standard annual rate, which is currently £190 a year. 

Alongside these changes, hybrid cars will lose the £10 discount that currently applies to them on first and subsequent year fees, so they will also pay the same as cars with petrol and diesel engines. 

Car tax will become more expensive from April 2025 for older cars with the lowest emissions, too. The annual rate of VED for cars registered on or after 1 March 2001 and before 1 April 2017, with CO2 emissions of up to 100g/km, will stop being free and rise to £20. 

Latest car tax bands: How much will it cost to tax my car?

For most drivers of new and older cars, the annual cost from the most recent tax rises go up by between £5 and £10 each year, but the annual price hikes are much steeper for drivers of new vehicles with the highest emissions. The first-year rate of car tax is set on a sliding scale based on the car's CO2 emissions. For the year from 1 April 2024 it starts with pure electric cars, which pay a £0 rate of VED. 

At present, pure electric vehicles don’t have to pay VED after year one, either, but that is set to change in April 2025, when their exemption from car tax ends. 

At present, EVs are also exempt from the additional 'expensive car' VED for new cars, including plug-in hybrids, costing more than £40,000. Anyone buying a new car costing more than that from 1 April has to pay £390 a year for years two to six (a total of £1950) on top of the standard rate of VED for the vehicle. This will apply to EVs from April 2025. 

After the first year, all petrol and diesel cars first registered after 1 April 2017 attract a flat rate of £190, while hybrid owners will pay £180 a year. In April 2025, hybrid cars lose their discount on the standard rate and owners of EVs registered from 1 April onwards must pay this rate of VED too.

First year VED rates 1 April 2024 to 31 March 2025

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

If you bought your car before 1 April 2017 or buy a second-hand car that was registered before that date, the amount of car tax you pay will depend on the car's emissions. Below are the VED rates for cars registered between 1 March 2001 and 31 March 2017. 

From 1 April 2025, Band A, for vehicles with emissions up to 100g/km of CO2, will be scrapped, and their owners will have to pay the Band B rate.

Why you still have to apply to tax your tax-free car

Owners of cars that qualify for free VED must still apply to renew their road tax, even though they don’t have to pay the fee.

Many low-emissions cars that were first registered before 1 April 2017 and emit up to 100g/km of CO2 qualify for free VED. However, their owners will still get an annual renewal reminder and must apply for road tax, even though there is nothing to pay. Anyone ignoring the renewal notice runs the risk of a fine of up to £1000.

Cars first registered between 1 March 2001 and 31 March 2017 and producing 100g/km of CO2 or less qualify for free VED. As for cars registered after 1 April 2017, only zero-emissions electric vehicles are eligible for free VED; everything else is charged according to their CO2 emissions.

How to pay for road tax

You can pay for your car tax online by visiting the Government's dedicated website. To do so, you'll need a unique reference number, which can be found on tax reminders issued by the DVLA, the V5C log book for your car, or from the green 'new keeper' slip in the log book if you've just bought the car.

You can also pay for road tax over the phone, although doing so means you cannot pay by direct debit, or you can pay by visiting a post office.

It's important to remember that even if you are legally exempt from paying road tax, for example if you're disabled, then you still need to register your car for tax purposes.

SORN: Taking your car off the road

You don't need to pay car tax on a car which is legally declared as being off the road, and the process of doing this is called a Statutory Off Road Notification – or SORN for short.

If you declare your car as being SORN, you can get a refund for any full months of remaining tax the car has, but you cannot legally use it on the road until you tax it again. If you've already sold your car, you don't need to declare it as being SORN, but you do need to tell the DVLA that it has been sold.

The SORN starts immediately if the tax on your car has already expired, but otherwise it will begin on the first day of the next month after your tax expires.

You can apply for the SORN notice online, and to do so you'll need to have the 11-digit number from your car's V5C document, and the 16-digit number from your car's tax reminder letter. You can also apply for the SORN notice by phone or by post.

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