Whether you know it as car tax, road tax, or by its actual name, Vehicle Excise Duty (VED), paying tax is a necessary part of owning a vehicle - just like taking out car insurance or getting a regular service.
But what is it, how much does it cost, and what documents do you need to tax your car? We’re here to explain.
What is car tax?
Drivers must buy car tax every year. The money this raises is paid directly into the central government fund, which is used for projects that benefit everyone – including road work and maintenance.
How much is my car tax?
The price of car tax varies depending on a few things. The age of your car and how polluting it is are the two primary factors in deciding what car tax band you’re in.
Penalties on more polluting cars are there to encourage people to own less polluting vehicles, like smaller cars, hybrids and EVs.
The cost of road tax also depends on when the car was registered:
- Cars more than 40 years old are exempt
- Cars registered before 1 March 2001 are taxed on engine size
- Cars registered between 1 March 2001 and 1 April 2017 are taxed on the car's official CO2 emissions
- Cars registered on or after 1 April 2017 only have the first-year rate based on CO2
Newer petrol cars
As of 1 April 2025, the standard rate of tax for petrol cars registered after April 2017 is £195.
Newer diesel cars
As of 1 April 2025, the standard rate of tax for diesel cars registered after April 2017 is also £195.
Petrol and diesel cars registered before April 2017
Emissions-based vehicle taxation first came into place in 2001.
If your car was registered between 1 March 2001 and 1 April 2017, it will be taxed based on its CO2 emissions:
- Up to 100g/km: £20
- 101-110g/km: £20
- 111-120g/km: £35
- 121-130g/km: £165
- 131-140g/km: £195
- 141-150g/km: £215
- 151-165g/km: £265
- 166-175g/km: £315
- 176-185g/km: £345
- 186-200g/km: £395
- 201-225g/km: £430
- 226-255g/km: £735
- 255+g/km: £760
Check out GOV.UK’s VED table to see how carbon emissions affect car tax.
Road tax for EVs
As of 1 April 2025, all new EVs registered have to pay £10 tax in the first year, increasing to £195 from the second year onwards. This applies to all EVs, regardless of price.
This rate will also apply to electric vehicles first registered after 1 April 2017.
Road tax for electric cars first registered between 1 March 2001 and 31 March 2017 is in the new 'Band B' rate, which is currently set at £20 per year.
Hybrids registered after 1 April 2017 will have the standard rate tax of £195, and hybrids registered before 1 April 2017 will be taxed based on CO2 emissions.
Check out our EV and hybrid road tax guide to learn more about what you need to pay.
More expensive cars
Cars (including EVs from 1 April 2025) with a listed price of over £40,000 have to pay the expensive car supplement.
As of 1 April 2025, this fee stands at £425 yearly for the first five years after registering the car for tax. This is on top of your yearly VED rate.
Even if you get a discount when you buy a car, if its Retail Price Index (RPI) is listed as over £40,000, you’ll still need to pay the expensive car supplement.
When do I need to tax my car?
Since tax discs were abolished in 2014, it can be difficult to remember when your tax is due.
Some garages offer a yearly reminder service when you get a MOT done, so it’s a good indication that your tax is probably due too.
You can also use the online DVLA road tax check service – you’ll need the car registration to find out if there’s valid tax in place.
The documents you need to tax a car vary depending on whether the car is brand new or not.
If you’re renewing car tax, or taxing a used car for the first time
You can buy or renew car tax online or over the phone if you have:
- a copy of the logbook in your name
- a reminder letter from the DVLA or the ‘new keeper supplement’ (green slip)
The DVLA will then search all the official databases to make sure that the car has a valid MOT and insurance in place.
If the car doesn’t have either of these, you won’t be able to buy tax.
Speak to your car insurer at least the day before, and they can make sure the database is updated with your new car details.
There’s no ‘grace period’ for you to arrange tax after buying a used car, so you should have car tax in place before driving away.
Any reputable second-hand car dealer should offer to help arrange your tax.
Renewing your tax at the Post Office
If you’re renewing your tax in person at the Post Office, you’ll need to take a copy of:
- the logbook (V5C) in your name (or reminder letter from the DVLA)
- your insurance certificate
- your MOT certificate
These requirements mean you won’t be able to tax a second-hand car for the first time at the Post Office.
The MOT requirements are removed if the car is less than three years old.
If you’re looking to cancel road tax
You can tell the DVLA to cancel your vehicle tax if:
- your vehicle is off the road
- you’re selling the car
- the car has been scrapped
The DVLA will refund tax for any full months you’ve paid for and not used.
If you’re taxing a brand-new car for the first time
Your car dealer will usually arrange car tax for you.
The ‘on the road’ price usually includes the cost of the first year’s car tax and new registration fee, so you won’t have to pay these separately.
The dealer will give the DVLA the information they need, including proof of your name and address.
After receiving the application, the DVLA will search the insurance database to check that your cover is in place.
Paying your car tax
You can buy car tax in one of three ways:
- annual lump sum
- six-monthly lump sum
- monthly instalments via Direct Debit
The cheapest way to pay is in a lump sum, although you may prefer the convenience of paying monthly – especially if you’re not planning on keeping the car for the full 12 months.
If you cancel your Direct Debit or miss payments, this can lead your car tax being cancelled, so it’s very important this doesn’t happen.
Driving without tax
According to the GOV website, you could face an out of court settlement (OCS) fine set at £30, plus one and a half times the outstanding vehicle tax, if you’re caught driving an untaxed vehicle.
Even if you don’t drive an untaxed vehicle but own it, you can still be charged. You’ll be issued a late licensing penalty (LLP) letter, which is £80. It’ll be reduced to £40 if you pay within 33 days.
This comes from the DVLA, so you won't get any points on your licence.
They do, however, have the power to clamp your vehicle until you pay, and the fine could increase to up to £1,000 (plus court fees) if the case goes to court.
Police use Automatic Number Plate Recognition technology to check if a car is taxed. If you're caught driving without tax by the police you could be issued with an instant fixed penalty notice of up to £1,000.
