Car road tax: your guide to Vehicle Excise Duty (VED)

Vehicle Excise Duty (car tax) explained by Parkers

Car tax explained by Parkers

Car tax, road tax or Vehicle Excise Duty (VED), to give it its correct title, is the responsibility of anyone who owns a car. Even if it's zero-rated (and you'll see the free car tax rules below), you're responsible for the car's paperwork, and keeping it up-to date. For most of us, our cars are subject to VED. It's a yearly requirement and a potentially big running cost, particularly if you purchase a flashier, thirstier model. 

For those with the largest engines, registered more recently, you can expect to pay anything up to £1,000 per year. The good news is that our guide will explain everything you need to know – and how to make the burden of running a high-tax car just a little less, er, taxing.

FAQ: popular car tax questions and answers

Where to tax my car?

At the Post Office
You can still tax your car at your local post office (a method we'd heartily recommend if you want your local PO to keep the lights on). You'll need to take you car's logbook, MoT certificate and insurance cover note. You don't get a tax disc anymore, but at least you're interacting with another human. 

Online at the DVLA website
For the rest of us time-poor souls, going to the DVLA car tax website is a simple, quick and efficient way to stay legal. You'll fill in a few online details and need just your logbook or car tax reminder letter with you to get a reference number from it in order to complete the application. The good news is that you can choose to pay monthly when you do it online, which splits up the pain of a large tax bill into 12 more manageable chunks.

How to check my car tax?

The DVLA website has a record of all vehicles registered and whether they've got a valid MOT and paid tax. As long as you have the car's logbook for its reference number, you'll be able to check instantly if its taxed – or whether it needs renewing.

How to cancel my car tax?

When you sell your car, it's your responsibility to inform the DVLA the new owner's details. Car tax is not transferrable between owners, but you will get a refund on any full months of car tax you've paid for. More on this below. You can also "cancel" your car tax if it's been stolen, become an insurance write-off or been SORN.

How to SORN my car?

If you're keeping the car but not driving it i.e. storing it, you can't 'cancel' your road tax but you can declare it off the road by filling in a Statutory Off Road Notification (SORN) form either at your Post Office or at the DVLA website. This means you won't need to pay for that year. However, if you get it back out on the road, you'll have to un-SORN it by re-tax it using the same methods above.

Full guide – how to SORN your car

If I buy a car, can the dealer tax it for me?

Dealers can still tax the car for you by using your name and address and the V5C/2 registration - sometimes called a New Keeper Supplement, and applying either online, over the phone or at the local post office.

It is ultimately your responsibility to make sure the car is taxed though so if you'd rather do it yourself, you could haggle to have the cost of the tax knocked off the car price.

Can I drive away from an auction without taxing a new car first?

Once the seller at the auction informs the DVLA that the car is sold, you will need to tax it immediately before you drive away. You can do this either online or by phone and the service is available 24 hours a day, seven days a week.

The DVLA advises that vehicles should not be purchased without sight of the Vehicle Registration Certificate (V5C) and you should insist on having the New Keeper Supplement given to you at the point of sale as you need the 12-digit reference number on it to be able to tax the car immediately.

What refund do I get when I sell a car?

There are instances when you may be a little out of pocket. Once you inform the DVLA that you have sold your car an automatic refund will be processed. You will only get a refund for each complete calendar month that the tax is paid for. For example; if you sell your car on 2 November, you will only receive the money back for tax paid after 1 December.

It is important that you tell the DVLA of any change of name or address as any refund will be paid to the details they have saved on record.

Paying by monthly direct debit costs more

As of October 2016, car tax could be paid by monthly direct debit. It does however, cost you 5% more than if you decided to pay annually. Ten percent increase is charged for six monthly payments and what's more, there's no refund on the surcharges if you 

Do I still get reminders?

You will still get a Renewal Reminder (the forms are called V11s and V85/1s) like before, if at any point you want to check the tax status of your car you can use the DVLA’s Vehicle Enquiry System but make sure you have your V5C registration certificate to hand.

Does van tax cost the same as car tax?

Vans (and most pickups) are taxed differently to cars: read our full guide to van tax to find out more.

How much is my car tax?

A selection of news cars, ranging in tax – all based on CO2

Using the Parkers car tax calculator is quick and efficient, and all you need to know is the car's make and model, and the date it was registered, if it's not a brand-new car. As a rule of thumb, the current car tax rates look like this.

All cars in the UK pay annual car tax, otherwise known as Vehicle Excise Duty (VED). Depending when a car was registered new, how its road tax is worked out can be worked out in one of three different ways:

  • Cars registered after 1 April 2017
    Fuel type and the car's new list price (if more than £40,000) determine the rate paid. Fully-electric cars are tax exempt.
  • Cars registered between 1 March 2001-31 March 2017
    CO2 emissions and fuel type decide the level of road tax.
  • Cars registered before 1 March 2001
    Engine capacity is the used to decide what tax is paid. Those that are up to 1549cc pay one rate and above that a higher rate applies.

The rate applied in a car's first year from new also changed from 1 April 2017, but is still based primarily on CO2 output. Here are the tax bands in much more detail.

Cars registered on or after 1 April 2017

CO2 emissions (g/km)  
First year rate
0 £0
1-50 £10
51-75 £25
76-90 £115
91-100 £140
101-110 £160
111-130 £180
131-150 £220
151-170 £555
171-190 £895
191-225 £1,345
Above 256


After the car’s first year, for cars with a list price below £40,000 the road tax costs are change. For all cars with a CO2 rating of zero, the tax bill is zero, and for all cars above 255g/km, you'll pay an additional £135 for an alternatively-fuelled car, and an additional £145 for petrol and diesel-powered cars. For cars above £40,000, you’ll pay an additional £320 to pay for the next five years. After five years, you’ll pay the standard annual rate depending on what fuel your vehicle uses.

Cars registered between February 2001-1 April 2017

CO2 emissions (g/km) Cost for 12 months' tax
Up to 100 £0
101-110 £20
111-120 £30
121-130 £125
131-140 £145
141-150 £160
151-165 £200
166-175 £235
176-185 £260
186-200 £300
201-225 £325
226-255 £555
More than 255 £570


Cars registered before 1 March 2001

Engine capacity (cc) Cost for 12 months' tax
Below 1549cc £160
Above 1549cc £265


Company car tax calculator

The good news is that if you're interested in company car tax, we have a calculator online and an explainer for how it works.

Which cars are free to tax?

  • New cars that zero-rated for (CO2) emissions and cost less than £40,000
  • Cars registered between 1 March 2001 and 1 April 2017 that produces less than 100g/km.
  • If you have a disability-related exemption
  • Cars that are registered ‘historic vehicles’. The current definition of this is any car that’s more than 40 years old

Further reading on Car Tax

>> Visit our car tax and VED advice landing page  >> Visit the official DVLA car tax website

>> Van tax explaine