Car Tax Calculator UK — Vehicle Excise Duty

How UK Car Tax Rates Work

The UK car tax system charges vehicles based on their carbon dioxide emissions. Cars registered before April 2017 pay a rate based on their specific CO2 emissions band, with zero-emission vehicles paying nothing and the highest-polluting cars paying over 600 pounds per year. For vehicles registered from April 2017 onwards, the first-year rate is based on CO2 emissions, but from the second year all petrol and diesel cars pay a standard flat rate regardless of emissions.

Electric vehicles currently pay no vehicle excise duty, though this exemption is scheduled to change. Hybrid vehicles may qualify for reduced first-year rates depending on their CO2 output. Cars with a list price over 40,000 pounds when new pay an additional supplement of 410 pounds per year for the first five years at the standard rate, regardless of their emissions level.

Paying Your Car Tax

You can tax your vehicle online at GOV.UK, at a Post Office or by phone. Payment can be made annually, by six-monthly direct debit or by monthly direct debit. Paying monthly or six-monthly costs slightly more overall due to a surcharge, but it spreads the expense. If you sell your vehicle or take it off the road, you can apply for a refund of any full remaining months of tax. Vehicles that are not taxed and not declared as off the road with a Statutory Off Road Notification face an automatic fine.

When buying a used car, tax no longer transfers with the vehicle. The new owner must tax the car before driving it, even if the previous owner’s tax has not yet expired. The seller receives an automatic refund for any remaining complete months. This means you cannot drive a newly purchased car home without first taxing it online or at a Post Office.

Planning for Future Tax Changes

The UK government has signalled that all new cars must be zero-emission from 2035. As the vehicle fleet transitions to electric, the tax system is expected to evolve to replace the revenue currently generated by fuel duty and VED. Drivers considering their next car purchase should factor in potential tax changes when comparing the total cost of ownership between petrol, diesel, hybrid and electric options.

Estimate your total driving costs with our fuel cost calculator, or compare electric and petrol running costs using the EV vs petrol calculator. See GOV.UK for the latest VED rates and exemptions.