How much is my car tax?

What is car tax?

Vehicle Excise Duty (VED), also known as car tax or road tax, is the fee that motorists must pay to be able to drive their car on UK roads. It is the responsibility of the person for whom the car is registered to to pay the road tax on an annual basis. 

Understanding tax rates can be tricky so here is a handy guide of what you need to know.

How much car tax will I pay?

Current VED rates on brand new cars are based on their CO2 emissions.  If your car is eco-friendly, such as a city car with a small engine or a mid-range hybrid, your first payment will be in one of the lower or middle bands of car tax. If you're driving a large SUV or a supercar, it's quite likely that you will be paying a higher sum for the first year. All fully electric cars, such as the MG4 or Kia EV6, are currently exempt from VED - but more on that later. 

Once a year has passed from when your car was registered, you are required to pay the standard tax of £165 each year, regardless of its carbon emissions. However, if the car is an “alternative fuel” type, such as a full hybrid or a plug-in hybrid, you will only pay £155 per annum.

Vehicles costing over £40,000

Owners of petrol and diesel cars with a list price of over £40,000 must pay an extra £355 fee on top of the standard £165, from the second year onwards for five years. This means the annual car tax would stand at £520 per year from years 2-6 of ownership. Owners of hybrid cars will be charged slightly less, at £510 per year.

Taxing my EV

Currently, all electric vehicles are exempt from any VED. This tax break for EV owners was designed to encourage drivers of cars with petrol and diesel engines to make the switch to zero-emission driving as it is more environmentally friendly. 

This is due to change, however, following an announcement from the UK Treasury. As electric cars are becoming increasingly popular year on year, it has been argued that EV drivers must now pay their share. EVs will be subject to the standard rate of road tax (£165) in 2025. 

What if I don't tax my car?

It is a legal requirement for your car to be taxed. If you're caught on the road driving an untaxed vehicle, you can be fined up to £1000, or even run the risk of having your car clamped or impounded.  

You'll be sent a reminder by the DVLA when your car tax is due to be renewed and the various methods of how to do so.  

If you're planning to take your car off the road for any number of reasons, you won't be required to pay tax. You will have to register your vehicle as being off the road and apply for a Statutory Off Road Notification (SORN) from the DVLA.