Buying a car involves handling all paperwork and paying taxes, so it’s important to know what you’re signing up for.
One of the main taxes British drivers must pay is the Vehicle Excise Duty, widely known as road tax. EV drivers are exempt from paying this tax but must still register their car for tax.
Here is a guide with everything you need to know about paying the road tax in the UK.
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Road tax, also known as VED (Vehicle Excise Duty), must be paid by any drivers whose cars are registered in the UK or driven on UK roads. The road tax rate isn’t fixed and depends mainly on the car’s CO₂ emissions but also on your car’s list price and the year it was registered.
The road tax must be paid when the car is first registered. This will cover your car for the next 12 months. You’ll then be able to choose to pay the road tax every 6 or 12 months.
TIP: The road tax fares are lower when paid every 12 months.
The road tax system is split into two main rates — the first-year rate varies depending on your car’s tailpipe CO₂ emissions, and the second-year rate is a fixed rate for each car category (electric, hybrid and petrol or diesel).
The road tax you must pay also depends on the car’s list price and the year it was first registered.
When it comes to the car’s tailpipe emissions, it’s simple — the fewer emissions your car produces, the smaller the road tax you must pay annually:
For any car, except fully electric cars, with a list price of £40,000 or above, you must pay a premium £390 rate in addition to any applicable road tax charges. The list price is considered the car’s published price before any discounts. Before buying a premium car, make sure to check the list price with your car dealer to know the road tax you’ll be paying.
IMPORTANT: You only have to pay this additional rate for five years from the second time the vehicle is taxed.
Therefore, when you first register the car, the premium rate won’t be added to your road tax.
All cars registered since March 2001 have their road tax calculated according to CO₂ tailpipe emissions. For cars registered before March 2001, the tax is calculated based on engine size.
The road tax fares also differ between cars registered after April 2017 and between March 2001 – April 2017.
Since it depends on many factors, it isn’t easy to give a solid answer to this question. Here are the average road tax rates for cars registered after April 2017.
For cars registered between 2001 and 2017, the fares differ, ranging from £20- £695 for all types of cars. There isn’t a premium surcharge for cars registered before 2017.
IMPORTANT: Currently, all fully electric battery cars are exempt from paying the Vehicle Excise Duty, no matter their list price.
However, this exemption is set to be removed starting April 2025, meaning that Zero-Emission cars registered after April 2017 will pay the lowest first-year rate of road tax (VED only). This means a £10 charge.
From the second year of registration onwards, EV drivers will have to pay the standard tax for the emission category they fall into, so they’ll likely have to pay £170 annually.
If the government’s decision remains unchanged, yes, all electric cars, regardless their registration year, will pay road tax starting 2025.
However, the additional surcharge for premium electric cars will apply only to electric cars registered on or after 1st April 2025.
Yes. You must register your vehicle for tax even if you’re exempt from paying any. It’s a legal requirement, just like being registered with the DVLA, having a roadworthy car and a valid MOT certificate.
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