Car Tax in the UK

  • We take a closer look at how car tax is calculated
  • Find out what the 2015/16 tax bands are
  • Calculate your car tax with our calculator
  • We take a closer look at how car tax is calculated
  • Find out what the 2015/16 tax bands are
  • Calculate your car tax with our calculator

Last year was an important time for car tax with some big changes taking place.

Firstly, after 93 years of service, in October we said farewell to the paper tax disc. In a bid to save money on administration costs, cars are now tracked by using automatic number plate recognition (ANPR) cameras.

The way you pay for tax was also given a shake-up in 2014. You can still pay every six months or annually like before, but now you can also pay by monthly direct debit - there is an additional five percent change for doing so, though.

Car tax can be paid either online, over the phone or at your local Post Office. 

The tax disc is not the only thing to be made redundant last year - the transfer of tax between buyer and seller was also scrapped.

When you buy a new car, you must pay from the first day of the month in which you purchase the car, even if you don't take ownership until weeks later. Anyone selling the car will get a refund for any full calendar months outstanding.

Tax increases

For many years now the Government has structured tax around the CO2 that your car emits in a bid to help accelerate the uptake of greener vehicles like electric cars and hybrids and reduce carbon emissions in the atmosphere.

In this year’s budget, the chancellor announced that further increases have been put in place from March onwards (see the new rates below). The good news is that cars which produce under 100g/km of CO2 are still tax-free.

Find out our top five tax-busting hatchbacks here.

Calculate your car tax

You would be hard-pushed to find anyone who likes to think about car tax, but it's worth considering when you're buying a car - regardless of whether it's new or used. If it's the former you'll have to pay a 'showroom tax' in the first year, while older cars cost the same to tax each year. 

By using our car tax calculator you can find out exactly how much tax you will need to pay. It also includes the car's VED band, CO2 emissions and first year tax rate as well as the overall annual cost to tax the car. 

Click here to use our tool.

2015/16 tax rates

VED Band

CO2 Emissions

First year rate

Standard rate

A

Up to 100g/km

£0

£0

B

101-110g/km

£0

£20

C

111-120g/km

£0

£30

D

121-130g/km

£0

£110

E

131-140g/km

£130

£130

F

141-150g/km

£145

£145

G

151-165g/km

£180

£180

H

166-175g/km

£205

£295

I

176-185g/km

£225

£350

J

186-200g/km

£265

£490

K

201-225g/km

£290

£640

L

226-255g/km

£490

£870

M

Over 255g/km

£505

£1,100

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