Vehicle Exercise Duty, Road Tax, and Car Tax are all the same thing, but VED is the formal name for car tax. It is a UK tax paid by all drivers to park or drive their cars on public roads legally. The amount you pay for road tax can depend on the type of car you drive and rates can range from as little as £0 up to £2,000 in the first year! Read the guide below to find out how much your car tax could cost you!
What is car tax?
Every car driven or parked on UK roads needs to be taxed. Car tax is enforced by the Driver and Vehicle Licensing Agency (DVLA), and the money you pay goes into a government fund, which is used for things like road repairs, road safety and maintenance works. The yearly road tax you pay depends on the vehicle you drive, and key factors such as the car’s age, emissions and engine size are considered when calculating road tax rates.
Do I have to pay car tax?
Yes, you have to tax your car every year. It is illegal to drive a car with no tax, and you can be fined up to £1,000 if you’re driving a car with no tax, issued by the DVLA. Some cars, such as low-emission vehicles and electric cars, are exempt from paying road tax but you still need to tax your car online even if there is nothing to pay. You can choose to pay your road tax annually, 6 monthly or monthly so there are plenty of options to suit drivers.
How much is my car tax?
There are several factors which can affect how much road tax you pay. Cars which release low emissions tend to be the cheapest to tax and tax bands are calculated by the amount of emissions produced. Your car’s age and engine size are also considered too.
You can check your car’s tax band by entering your make and model online.
Car tax bands explained:
Understanding car tax bands can seem complicated so we’ve listed the current road tax bands listed on the DVLA website.
First tax payment when the vehicle is registered:
| CO2 emissions | Diesel cars (TC49) that meet the RDE2 standard and petrol cars (TC48) | All other diesel cars (TC49) | Alternative fuel cars (TC59) |
|---|---|---|---|
| 0g/km | £0 | £0 | £0 |
| 1 to 50g/km | £10 | £30 | £0 |
| 51 to 75g/km | £30 | £135 | £20 |
| 76 to 90g/km | £135 | £175 | £125 |
| 91 to 100g/km | £175 | £195 | £165 |
| 101 to 110g/km | £195 | £220 | £185 |
| 111 to 130g/km | £220 | £270 | £210 |
| 131 to 150g/km | £270 | £680 | £260 |
| 151 to 170g/km | £680 | £1,095 | £670 |
| 171 to 190g/km | £1,095 | £1,650 | £1,085 |
| 191 to 225g/km | £1,650 | £2,340 | £1,640 |
| 226 to 255g/km | £2,340 | £2,745 | £2,330 |
| Over 255g/km | £2,745 | £2,745 | £2,735 |
Second tax payment onwards:
| Fuel type | Single 12-month payment | Single 12-month payment by Direct Debit | A total of 12 monthly payments by Direct Debit | Single 6-month payment | Single 6-month payment by Direct Debit |
|---|---|---|---|---|---|
| Petrol or diesel | £190 | £190 | £199.50 | £104.50 | £99.75 |
| Electric | £0 | N/A | N/A | £0 | N/A |
| Alternative | £180 | £180 | £189 | £99 | £94.50 |
How to save on car tax:
Car tax rates are set by the DVLA and there’s very little wiggle room. However, if you want to save money on the running costs of a car, you could consider choosing a car which is in a low tax band. These cars tend to produce small amounts of emissions such as hybrid and electric cars but could also have a small engine too.