Road tax, also called vehicle tax or vehicle excise duty, is a payment that must be paid on all vehicles registered in the UK that are driven on or kept on a public road. If your vehicle is kept off a public road (such as in a garage or driveway) it must still be taxed or have a Statutory Off Road Notification (SORN) if you are not using it.
Money paid for road tax is then taken and used for a whole range of public services as it is added to the central funds of the exchequer of the UK Government. The payment covers essential services everywhere, not just directly related to driving and the roads.
When you are looking to pay car tax on a new car it may become a little confusing as to which tax rate your car qualifies for as there are several different classifications, depending on a number of factors. Read on in our guide complete guide to taxing your car.
Vehicle tax rates, or vehicle tax bands are based on different factors depending on when your vehicle was first registered.
Cars registered before 1 March 2001 is split into two engine sizes: not over 1549cc and over 1549cc. This was a fairly simple and straightforward way for vehicles to be split and the ones that fall into this category are known as private/light goods vehicles or private motor cars or good vehicles that do not exceed more than 3500kg in weight. Currently the vehicle tax rates for 12 months are set at £200 for not over 1549cc and £325 for over 1549cc.
The next category covers cars registered after March 2001 and before 1 April 2017 and splits these into 13 bands of CO2 emissions. Wherever your vehicle falls on the scale is the amount of annual vehicle tax you are required to pay. The less CO2 emissions that your vehicle has, the less your tax payment will be.
The payments for each band currently range from £0 for cars with CO2 emissions up to 100g/km in Band A to £695 for cars with CO2 emissions over 255g/km in Band M. It's worth noting that cars in Band A will move into Band B in 2025 as the government changes the policy surrounding zero or low-emission vehicles. Alternative fuel cars, such as those that use LPG or biofuel, are charged £10 less than petrol or diesel cars in their band.
The system for taxing a new car changed on 1 April 2017 and affected all vehicle registration from that date onwards. Cars registered prior to this are unaffected by the changes and still follow the previously discussed tax rates. The new system has the first year "showroom" tax payment still based on CO2 emissions before all cars return to a flat rate from year two onwards. This means that your first tax payment will be higher than the years following and is completely normal.
Zero emission vehicle tax is currently still set at £0 but this will change in 2025 when EVs will be required to pay road tax for the first time. New cars with a list price of over £40,000 pay an additional £390 for five years of their lifespan, starting the second time that the vehicle is taxed, as they fall into the premium category. Zero emission vehicles do not have to pay this currently.
Every year the price of car tax increases with inflation. All prices discussed above are correct from April 2023 - March 2024.
There are several categories that allow for an exemption from paying road tax. Vehicles eligible for free car tax covers vehicles used by a disabled person, disabled passenger vehicles, historic vehicles, electric vehicles, and vehicles used for agriculture horticulture, and forestry.
Vehicles used by a disabled person are exempt from paying road tax if you receive a higher rate mobility component of Disability Living Allowance, the enhanced rate mobility component of Personal Independence Payment, the enhanced rate mobility component of Adult Disability Payment, a higher rate mobility component of Child Disability Payment, War Pensioners' Mobility Supplement, or Armed Forces Independence Payment.
You can only have one vehicle tax exemption at any one time and the vehicle must be registered in the disabled person's name or their nominated driver's name. You can then only use that vehicle for the disabled person's own needs and cannot be used by the nominated driver for their own personal use.
Disabled passenger vehicles are those which are used by organisations that provide transport for disabled people, except from ambulances, and historic vehicles refers to vehicles made before 1 January 1983. You are able to check online through the government website if your vehicle is exempt.
As previously mentioned, electric vehicles are currently exempt from paying road tax but this will change in 2025. In order to qualify for the exemption the electricity must come from an external source such as a chargepoint, an electric storage battery not connected to any power source when the vehicle is moving, or hydrogen fuel cells.
Finally vehicles which are used for agriculture, horticulture, and forestry are exempt from paying road tax. This applies to vehicles such as tractors, light agricultural vehicles used off-road, and "limited use" vehicles that are used for short journeys up to 1.5km on a public road between land that is used by the same person.
If you're not using your vehicle and storing it in a garage or a driveway for an extended period of time you can register it as off the road, known as a Statutory Off Road Notification (SORN). You'll get a refund for any full months of remaining tax but you cannot drive it again until it has been taxed again.
If you're not sure how much your road tax is the first thing you're likely to do is search "how much to tax my car" and you'll see various car tax calculator options to choose from. This is a quick and easy way to match your car up with how much vehicle tax you need to pay.
The Government website has information about all current tax bands and pricing in the section for the Driver and Vehicle Licensing Agency (DVLA) and is the most reliable source, especially around the times when vehicle excise duty changes in price.
There are also apps and websites available where you can input your car's make, model, and specification or your registration number and they will check the details against the DVLA database and confirm the amount of tax that you will need to pay. This is particularly helpful if you're searching for a new car and don't want to be surprised by the amount of tax you will be paying due to the fuel type or original price of the vehicle.
The easiest way to pay your road tax is online through the DVLA website. You will need a reference number in order to tax your vehicle which you will find on any reminder letters that the DVLA have sent to you about your road tax, your vehicle logbook (V5C) in your name, or the green "new keeper" slip from the previous log book if you have just purchased the car.
Online you are able to pay the amount in full by debit or credit car or, if you prefer, you can set up a monthly direct debit. You will also have the option to set up your road tax for 6 months or 12 months which is great if you know that you'll be changing your car or are unsure if you will need a full year of tax.
If you opt for a monthly payment then you will pay slightly more as there is a 5% surcharge on direct debit. Petrol and diesel cars require payment whilst electric cars or those that are exempt still require you annually to apply for the relevant application to ensure that the vehicle is still "taxed" correctly.
Alternatively you can phone the DVLA directly if you would prefer assistance or aren't comfortable using the online system. It's worth noting that you cannot set up a direct debit over the phone. You can also visit a Post Office branch that deals with vehicle tax. As not all branches are able to process vehicle tax it is worth either phoning your local branch or checking online if they offer the service.
It is an offence in the UK to drive a car that is not taxed.
If you are caught driving an untaxed car you will be fined £80 and you will need to pay for the time that the car was untaxed. If you don't pay the fine it can increase to as much as £1000 if the case goes to court. The DVLA can also have your car clamped until the fine is paid in order to stop you from driving without road tax in place.
*All annual costs correct at time of writing for 2023/2024 car taxing.
