Vehicle Excise Duty is commonly known as road tax or car tax. Find out how much you need to pay and whether you might be exempt.
Car tax, or road tax, is officially known as Vehicle Excise Duty (VED). It’s money that you as a motorist pay to the government to be used to maintain and repair the UK’s roads.
It’s not optional – you legally must pay it at the set rate for your car.
But it can be a significant annual running cost for your car alongside insurance and fuel and might even influence which vehicle you buy next.
But the good news is that some cars are cheaper than others for road tax – and some cars are zero rated for VED and don’t pay anything at all.
Most vehicle owners need to pay vehicle excise duty. It’s illegal to take your car, motorbike, van or other vehicle onto public roads if it isn’t taxed and insured.
But you don’t need to pay road tax if you keep your vehicle on private land, for example your driveway or garage, as long as you declare a Statutory Off Road Notification (SORN). You can’t drive your car while it has a SORN.
There are a few other exemptions that mean you won’t need to pay car tax.
You might not have to pay vehicle excise duty because either you or your vehicle is exempt.
You’ll be exempt from paying car tax if:
Your vehicle will be exempt if:
You’ll still need to tax your vehicle each year even if you or it are exempt. You just go online when you get your annual reminder and apply for the tax, but no payment will be taken.
All electric cars are now exempt from paying road tax.
For all other vehicles, the way VED’s calculated has changed over the years, so how much you pay annually will depend on when your car was registered, its emissions, or its engine size.
If you have a new car that’s in its first year of registration, you pay a first-year rate which is different to what you pay in subsequent years.
First year car tax is based on CO2 emissions and fuel type.
The latest first-year rates for cars registered on/after 1 April 2021 are:
|CO2 emissions g/km||Petrol cars and diesel cars meeting RDE2 standard||Other diesel cars||Alternative fuel vehicles (hybrid and LPG cars)|
If your car’s more than a year old, you’ll pay the standard rate. For cars registered after 1 April 2017, it’s based on your car’s fuel type.
If your car had a list price of £40,000 or more at first registration, you’ll pay the additional rate.
The second-year onwards rates from 1 April 2021 are:
|Fuel type||Annual rate|
|Alternative fuel (hybrid and LPG cars)||£145|
Cars registered 1 March 2001-31 March 2017
|CO2 emissions (g/km)||Petrol/diesel cars||Alternative fuel vehicles (hybrid and LPG cars)|
|Up to 100||£0||£0|
You can use a credit or debit card to pay for your road tax, or you can set up a Direct Debit.
Direct Debit payments can be annually, twice a year or monthly, but there’ll be a 5% surcharge for paying bi-annually or monthly.
You’ll need a tax reminder letter (V11) or your car’s logbook (V5C). If you don’t have the logbook yet, you’ll need the green new keeper slip.
Most people pay for their road tax online, but you can also take your reminder or logbook to the Post Office to do it.
If you sell your car or declare a SORN to keep it off the road you can cancel your road tax to get a refund for any full months of tax you have remaining.
You can tell the DVLA online if you’ve sold your car and need a tax refund.
Once you’ve done that, or declared a SORN, your unused car tax will be refunded automatically by a cheque sent to you.
You might also need to cancel it for a refund if: