Vehicle Excise Duty (VED), often called car tax or road tax, is a legal requirement for most vehicles driven on UK roads. Understanding how it works will help you budget more effectively and avoid surprises when buying or running a car.
For the latest official figures, you can view the full government tables here:
Official UK vehicle tax rate tables
What determines your car tax?
Your annual VED bill is based on several factors:
- Date of first registration
- Fuel type
- CO2 emissions
- Original list price
Most newer vehicles now fall under a standard annual rate of around £200 from the second year onwards.
Key car tax updates for 2026
Electric vehicles now pay VED
Electric cars are no longer exempt from road tax. From April 2025 onwards, they are taxed in the same way as petrol and diesel vehicles, including the standard annual rate.
Higher threshold for premium vehicles
If your vehicle was expensive when new, you may pay an additional yearly charge:
- Over £40,000 for petrol or diesel
- Over £50,000 for electric cars
This adds £440 per year for five years from the second year of registration.
How much is car tax in 2026?
For cars registered after April 2017:
- Standard annual rate: £200
- Monthly or six monthly payments cost slightly more overall
First year tax is different and depends on emissions, with the lowest rates for low emission vehicles and significantly higher charges for high emitters.
You can check the exact figures using the official tables:
Check current VED rates on GOV.UK
How UK car tax bands work
The system varies depending on when your car was first registered.
Cars registered after April 2017
This system uses three key elements:
- First year rate based on CO2 emissions
- Standard flat rate from year two
- Extra charge for higher value vehicles
This approach was introduced to simplify taxation as emissions reduced across newer cars.
Cars registered between March 2001 and April 2017
These vehicles are taxed using emissions bands.
In general:
- Lower CO2 = lower tax
- Higher CO2 = higher tax
For example:
- Up to 100g/km: from £20 per year
- Mid range emissions: around £170 to £225
- Over 255g/km: up to around £790 annually
You can explore the full breakdown here:
CO2-based tax bands (2001 to 2017 vehicles)
Cars registered before March 2001
Older vehicles are taxed based on engine size rather than emissions:
- Smaller engines pay less
- Larger engines pay more
What is VED and why do you pay it?
VED is a tax for using a vehicle on public roads in the UK. It applies to most vehicles unless officially declared off the road with a SORN.
It is collected centrally and contributes to general public spending rather than being reserved solely for road maintenance.
How car tax is enforced
There is no longer a paper tax disc. Instead, enforcement is digital.
Authorities use Automatic Number Plate Recognition cameras to identify untaxed vehicles by checking against national records in real time.
When do you need to pay?
Car tax is typically due annually, though you can choose to pay:
- Annually
- Every six months
- Monthly by direct debit
You will usually receive a reminder before expiry, and it must be renewed before the end of the relevant month.
What happens if you do not tax your vehicle?
Failing to tax your car can result in:
- An £80 penalty, reduced if paid quickly
- Additional enforcement action if ignored
- Clamping or removal of the vehicle
Serious cases can lead to fines of up to £1,000 or more.
Vehicles that may be exempt
Some vehicles do not have to pay VED, although they must still be registered correctly. These include:
- Vehicles used by disabled drivers
- Historic vehicles over 40 years old
- Agricultural vehicles
- Mobility scooters and similar equipment
Buying or selling a car
Car tax does not transfer between owners:
- Buyers must tax the vehicle before driving it
- Sellers automatically receive a refund for any full unused months
Always update ownership details with the Driver and Vehicle Licensing Agency promptly.
Final thoughts
Car tax in the UK is largely driven by emissions, vehicle age and value. While the system has been simplified for newer cars, understanding the different banding structures is still essential when choosing your next vehicle.
For the most accurate and up to date figures, always refer to the official government tables:
View all UK vehicle tax rate tables
