If you’re a motorist in the UK, you’ve likely been anticipating the upcoming 2025 car tax VED rates (vehicle excise duty), commonly known as road tax.
It remains one of the essential annual expenses associated with car ownership and can be a confusing topic to navigate with frequent adjustments to car tax bands over the years. VED car tax rates on most new and used vehicles have risen from 1 April 2024, but only in line with inflation based on the retail price index (RPI).
The Chancellor of the Exchequer confirmed that the increase in the 2025 VED car tax rates would be part of the Spring Budget for 2024. Under the previous tax system, petrol and diesel vehicles were charged a flat rate of £180, which has now been adjusted to £190. Alternative-fuelled vehicles have also seen a £10 increase, now being charged at a yearly rate of £180.
Currently, VED rates are tied to a car’s carbon dioxide emissions in the first year; thereafter your vehicle is charged at a flat rate. However, additional charges apply to vehicles that cost more than £40,000 when new, in years two through six of the car’s life. Only electric cars enjoy no VED at all.
But this favourable treatment for EVs is set to shift in the near future. The government has announced that electric cars’ VED exemption will end in 2025 and they will be subject to the next-lowest first-year rate. While this decision may stir controversy, it’s deemed a necessary move. VED generates over £7 billion annually for the Treasury and the continued exemption of EVs would significantly impact that revenue.
You can find out how much a particular car costs to tax using Parkers’ car tax checker.
Will new car buyers notice much of a difference?
At the low end of the banding, most new car buyers are unlikely to notice the bit extra they now have to pay in first-year VED. In most cases, the increases are only £5 to £30. At the top end of the scale, the increases get much bigger – the rate for cars that emit more than 255g/km of CO2 has increased by £360. Note that first-year VED charges are usually included in the monthly payment of car finance and leasing deals.
Cars costing more than £40,000 attract VED car tax surcharge
Vehicles that cost more than £40,000 when new (after options) incur an extra annual charge of £410 (this has increased from £390) on top of the standard VED car tax rates, from their car’s second through sixth birthdays.
When the charge was introduced in 2017 it was largely only high-end, premium-brand cars that attracted it. However, recent inflation in new car prices means that many more mainstream models are liable for it, including top-spec Vauxhall Astras.
It’s even easier to get caught out when buying a used car. That’s because it’s often not clear what a car cost when it was new, especially as the £40,000 threshold takes the price of any optional extras into account. And most online car tax calculators don’t indicate if a particular car will incur the extra charge. Often the only way to find out is by starting the process of paying for road tax on the government’s website.
Classic car tax exemption
Vehicles built before 1 January of each calendar year become exempt from VED after 40 years. That means any car built during 1983 now doesn’t incur a charge; cars built in 1984 become exempt in 2024, and so on. Note that it isn’t an automatic process and owners need to apply for the exemption.
Year one VED rates for cars registered on or after 1 April 2017
This payment covers your car for the first 12 months of its life, from the date it’s first taxed.
| CO2 (g/km) | Diesel cars (TC49) that meet RDE2 standard and petrol cars (TC48) | All other diesel cars (TC49) | Alternative fuel cars (TC59) |
| 0 | £0 | £0 | £0 |
| 1- 50 | £10 | £30 | £0 |
| 51 – 75 | £30 | £135 | £20 |
| 76 – 90 | £135 | £175 | £125 |
| 91 – 100 | £175 | £195 | £165 |
| 101 – 110 | £195 | £220 | £185 |
| 111 – 130 | £220 | £270 | £210 |
| 131 – 150 | £270 | £680 | £260 |
| 151 – 170 | £680 | £1,095 | £670 |
| 171 – 190 | £1,095 | £1,650 | £1,085 |
| 191 – 255 | £1,650 | £2,340 | £1,640 |
| 226 – 255 | £2,340 | £2,745 | £2,330 |
| Over 255 | £2,745 | £2,745 | £2,735 |
Rates for the second year onwards
This payment comes into effect from year two of the car’s life – in other words, from the second time it’s taxed.
Alternative fuel vehicles include hybrids, bioethanol and liquid petroleum gas.
| Fuel type | Single 12 month payment/by Direct Debit | Total of 12 monthly payments by Direct Debit | Single 6 month payment/by Direct Debit |
| Petrol or diesel | £190/£190 | £199.50 | £99.75 |
| Electric | £0/N/A | N/A | £0/N/A |
| Alternative | £180/£180 | £189 | £94.50 |
Rates for cars with a list price of more than £40,000
Cars that cost more than £40,000 new (including options) incur an extra charge of £410 for five years, starting when the car is taxed for the second time. The full charges are shown below.
| Fuel type | Single 12 month payment/by Direct Debit Diesel (RDE2)* and petrol | Total of 12 monthly payments by Direct Debit | Single 6 month payment/by Direct Debit |
| Petrol or diesel | £600/£600 | £630 | £315 |
| Alternative | £590/£590 | £619.50 | £309.75 |
A new car’s environmental credentials are made clear on an updated version of the government’s labelling system.
FAQs
Where can I tax my car?
Most people get their car tax direct from the ‘tax your vehicle’ section of the UK government website. It’s easiest if you can enter the reference number from your road tax reminder letter, otherwise you’ll have to enter a few details about your car for the system to find it. Either way, it’s a quick and easy process. At the payment stage, you can buy either six or 12 months tax and choose to spread the cost with monthly payments, or pay in a lump sum.
You can also still pay for road tax at your local Post Office. You’ll need to take your car’s V5C registration document, plus the MOT and insurance certificates to prove the car is legal. You don’t get a paper tax disc to show for the transaction anymore, but at least you’re interacting with another person.
How do I check my car tax?
You can do this at the ‘check if a vehicle is taxed’ section of Government website. Just enter your car’s registration – or that of any other car, for that matter – and you’ll be shown when its tax expires. The website also shows when the car’s MOT expires – MOT history is shown separately at the ‘check the MOT history of a vehicle’ web page.
How do I cancel my car’s UK road tax?
Car tax is no longer transferrable between owners. When you move your car on to a new keeper – or it leaves your possession for any reason – you need to cancel the tax when you inform the DVLA that it has changed hands. If you paid in full, you’ll be refunded for any remaining full months of tax. Direct Debit payments are cancelled automatically, so you’ll have to set up a new one when you get your next car.
How do you SORN a car?
It often happens that you may not be able to drive your car for a while. Perhaps it needs lengthy repairs, or you’re going travelling, or you’re just not able to drive. In those cases, you can put a statutory off-road notice (SORN) on your car, so you don’t have to pay road tax for the duration of that period. Parkers has a full guide on how to SORN your car.
If I buy a car, can the dealer tax it for me?
A dealer can still tax a car on your behalf online, over the phone or at a Post Office. To do so, they’ll need your name and address, and a code number from the New Keep Supplement part of the car’s V5C registration document. However, taxing the car is ultimately your responsibility, so make sure the dealer provides proof that they’ve sorted it out. Alternatively, you can always take care of it yourself.
Do I get a tax refund when I sell a car?
Road tax used to be transferrable between a car’s owners but that’s no longer the case. If you move your car on to a new owner – or scrap it – you need to cancel the tax. If you pay by Direct Debit, that’s done automatically when you inform of the DVLA of the new owner’s details.
Either way, any remaining full months of tax will be refunded. So, if you paid for 12 months road tax and sell the car three months into that period, you’ll receive a refund equivalent to nine months of road tax. Refunds are paid to the bank account details the DVLA has on record for you, so make sure they’re up to date.
Does paying for road rax by monthly Direct Debit cost more?
You can pay for road tax by Direct Debits taken out of your bank account every month. However, doing so adds to the cost. Pay monthly for 12 months tax and the cost goes up from £190 to £199.50 for a petrol or diesel car registered after 1 April 2017. Costs vary between different cars, which you can read about earlier in this article.
Curiously, paying for six months by Direct Debit is actually cheaper than making a one-off payment. But paying for 12 months in one lump sum is the most cost-effective option.
Do I still get road tax reminders?
The DVLA stills sends out road tax renewal reminders to a car’s registered keeper about one month before it expires. Known as a V11 document, it includes a 12-digit code that you can use to pay for your car’s road tax. You can also check your car’s road tax expiry date online.
