UK Road Tax (VED) Explained

Vehicle Excise Duty — better known as road tax or car tax — confuses a lot of UK drivers, partly because the rules have changed several times. How much you pay depends heavily on when your car was first registered. This guide breaks down each system so you know exactly what you should be paying, and how to avoid paying more than you need to.

What is VED?

Vehicle Excise Duty is an annual tax you must pay to drive or keep a vehicle on a public road in the UK. If you're not using the car on the road you can declare it SORN (Statutory Off Road Notification) and pay nothing while it's off the road. The amount of VED is set by the government and based primarily on emissions and registration date.

Cars registered before March 2001

The oldest system is the simplest. Cars first registered before 1 March 2001 are taxed purely on engine size, split into two bands: not over 1549cc, and over 1549cc. There's no CO2 element at all because emissions data wasn't recorded in the same way back then.

Cars registered March 2001 to March 2017

This is the classic CO2-banded system, running from band A to band M. The cleaner the car, the less you pay — and the lowest-emitting cars in band A historically paid nothing at all. A typical small petrol car like a 1.2 supermini often sits in band C, paying around £35 a year, while a thirsty performance car in band M can pay close to £800.

Cars registered after April 2017

The current system works differently. In the first year you pay a "showroom tax" based on CO2 emissions, which can be steep for high-emitting cars. From the second year onward almost everything moves to a single flat standard rate — currently around £190 a year for petrol and diesel cars — regardless of emissions.

The expensive car supplement

Cars with a list price over £40,000 when new attract an additional supplement on top of the standard rate for five years (from the second to the sixth year). This applies even to electric cars under the latest rules, and is based on the original list price, not what you paid second-hand — so it can catch out buyers of nearly-new prestige cars.

Electric and hybrid vehicles

For years, fully electric cars paid zero VED. That changed from April 2025 — electric vehicles are now subject to VED, including the standard rate and, where applicable, the expensive car supplement. Hybrids no longer receive the small discount they once did. If you're buying an EV expecting free tax, check the current rules carefully.

How to avoid overpaying

• Check before you buy: Run a free carDNA check to see the exact annual tax for any car before you commit — it can be the difference between £35 and £600 a year.
• Remember tax doesn't transfer: Since 2014, road tax no longer transfers with the car. When you buy, the seller's tax is cancelled and you must tax it yourself before driving away.
• Pay annually if you can: Paying monthly by direct debit adds a 5% surcharge compared to paying for the full year upfront.
• Use SORN when off the road: If a car is stored or being worked on, declaring SORN stops you paying for tax you're not using.

What happens if you don't tax your car?

Driving an untaxed car is an offence. The DVLA runs automated checks against its database and can issue fines, clamp or even crush untaxed vehicles. Penalties start with an £80 fine and escalate quickly. The tax status of any vehicle is shown instantly on carDNA, so you can always confirm where a car stands.