Car tax or road tax, also known as Vehicle Excise Duty (VED), is mandatory for all cars registered in the UK, regardless of usage. Whether your vehicle is parked unused on private property or actively driven, you must either tax it or submit a SORN (Statutory Off Road Notification). 

Changes to UK car tax bands were announced by the government in 2022 and 2023, impacting the tax due annually and potentially altering future tax rates. If you need to cancel your road tax, refer to the guide provided for instructions.

Car tax bands and rates

The amount of tax you pay annually depends on your vehicle’s VED band, determined primarily by its CO2 emissions and fuel type. Cars registered before March 2001 are taxed based on engine size, while those registered between March 2001 and March 2017 pay based on emissions.

For cars registered after April 2017, the tax rates vary in the first year and then follow a standard rate thereafter. There are also adjustments and supplements for expensive vehicles and zero-emission vehicles, with changes expected in the upcoming tax year beginning April 2025.

Expensive car supplement

For vehicles with a list price exceeding £40,000 (pre-discount), an additional annual VED of £390 applies. This supplementary tax must be paid for five consecutive years, commending from the vehicle’s second taxation period.

Consequently, during years two to seven of ownership, higher tax expenses are incurred, albeit typically during the vehicle’s warranty period, minimalising maintenance expenses. This additional tax obligation persists even if the vehicle is sold within the five-year period, underscoring the importance of verifying this aspect when purchasing a used vehicle.

Tax-exempt vehicles

Certain vehicles are exempt from paying car tax, including : 

• Historic vehicles registered before January 1st 1974
• Select individuals receiving Disability Allowance, Personal Independence Payment, Adult Disability Payment, or Child Disability Payment
• Beneficiaries of War Pensioners’ Mobility Supplement or Armed Forced Independence Payment
• Vehicles with a Statutory Off Road Notification (SORN)