Car tax explained: a complete guide to getting it right
April 01, 2026 by Siobhan Doyle
Confused about road tax or Vehicle Excise Duty (VED)? This guide explains everything you need to know.
Road tax, officially known as Vehicle Excise Duty (VED), is a requirement for almost all motorists in the UK. It applies to most vehicles, including new and used cars, electric cars, and in some cases historic vehicles or those owned by drivers receiving certain benefits.
But how do you tax a car? How do you actually buy road tax, and how much will it cost for your vehicle? Our guide explains everything you need to know.
Remember, you can buy a brand new or used car right here on Carwow. And you can also sell your car, too. We’re here to help you through every step of your car-changing journey.
What is car tax?
Car tax (officially Vehicle Excise Duty, or VED) is a UK tax most vehicle owners must pay to legally use or park a car on public roads.
Originally known as the Road Fund Licence, it was introduced to, as the name suggests, fund roads. Today, VED goes into general Government spending rather than being ring-fenced for transport.
Although still commonly called “road tax”, it is a legal requirement for most vehicles. It can usually be paid annually, every six months, or monthly.
The Driver and Vehicle Licensing Agency (DVLA) manages car tax, vehicle registration, and number plates, and sends renewal reminders. However, the money collected goes into the Government’s Consolidated Fund, which is used for wider public spending across the UK.
Do I need car tax?
Yes, in most cases, you do need car tax (Vehicle Excise Duty) to legally drive or keep a car on UK roads.
There are a few exceptions. Cars over 40 years old that qualify as “historic vehicles” are usually exempt. Some people receiving certain disability benefits may also be eligible for exemption, but this must be applied for when taxing a vehicle online.
If a car is not being used or kept on public roads, you can register it as off the road with a Statutory Off Road Notification (SORN). While a SORN means you don’t need to tax the vehicle, it must be kept on private land and not parked on a public road.
How much does car tax cost?
The standard rate of Vehicle Excise Duty (VED) for cars first registered from 1 April 2017 is now £200 per year. This applies to petrol, diesel, and hybrid cars once they enter the standard-rate period, where most vehicles pay a flat annual charge after the first-year rate.
Electric vehicles are also affected by these changes to VED. EVs are no longer exempt from road tax. Existing EVs registered between April 2017 and March 2025 now pay the standard £200 annual rate, while new EVs registered on or after 1 April 2026 pay a £10 first-year rate before moving onto the £200 standard rate.
If your car was registered between 1 March 2001 and 31 March 2017, you’ll pay road tax under a different set of rules, while a third regime applies to cars first registered before March 2001.
Cars first registered on or after 1 April 2017 – road-tax system from 1 April 2026
The current regime, which applies to new cars and any used ones first registered from 1 April 2017, has three key elements to it:
- A one-off first-year rate, which is based on how much carbon dioxide (CO2) a car emits.
- A fixed annual subsequent rate of £200.
- A ‘luxury car supplement’, which applies to cars costing £50,000 or more and runs from years two (IE after the first, CO2-based annual charge) to years six of a car’s life.
First-year road tax costs
This is the first-year rate of Vehicle Excise Duty (VED), based on a car’s CO2 emissions. It’s usually included in a new car’s “on-the-road” price when you buy it. Cars with higher emissions fall into higher tax bands and pay more in their first year of road tax.
| CO2 emission figure (g/km) | First-year cost |
|---|---|
| 0 | £10 |
| 1 to 50 | £115 |
| 51 to 75 | £135 |
| 76 to 90 | £280 |
| 91 to 100 | £365 |
| 101 to 110 | £405 |
| 111 to 130 | £455 |
| 131 to 150 | £560 |
| 151 to 170 | £1,410 |
| 171 to 190 | £2,270 |
| 191 to 225 | £3,420 |
| 226 to 255 | £4,850 |
| Over 255 | £5,690 |
Second-year onwards road tax cost and ‘luxury car supplement’
After you’ve paid the car’s first year of road tax, you’ll be liable for a fixed annual payment of £200 from the second year and thereafter.
There’s also an ‘luxury car supplement’ which costs an additional £440, which you pay from the second year, and applies to cars that cost £50,000 or more (after options, so a £49,999 car with a £2 optional extra attracts this supplement) when new. This tax runs from the second to the sixth year of an expensive car’s life, for an annual cost of £640 over that period, after which tax reverts to £200 a year.
Note these costs assume you pay for your road tax annually. If you pay every six months, there’s a 5% surcharge, and a 10% surcharge if you pay monthly.
Cars first registered on or after March 2001 but before 1 April 2017
As you can see in the table below, different rules apply if your car was licensed between 2001 and 2017; cars from this period are not subject to the luxury supplement, while annual road-tax rates are entirely determined by carbon dioxide emissions.
Do note that cars emitting under 100g/km of CO2 now have to pay road tax; these vehicles tend to be diesels from the period with relatively small engines, though many such cars fall foul of Clean Air Zone rules, having to pay to enter zones such as London’s ULEZ.
| Band | CO2 emission figure (g/km) | Yearly cost |
|---|---|---|
| A | Up to 100 | £20 |
| B | 101 to 110 | £20 |
| C | 111 to 120 | £35 |
| D | 121 to 130 | £170 |
| E | 131 to 140 | £200 |
| F | 141 to 150 | £225 |
| G | 151 to 165 | £275 |
| H | 166 to 175 | £325 |
| I | 176 to 185 | £360 |
| J | 186 to 200 | £410 |
| K* | 201 to 225 | £445 |
| L | 226 to 255 | £760 |
| M | Over 255 | £790 |
*Band K includes cars that have a CO2 emission figure over 225g/km but were registered before 23 March 2006.
Cars first registered before March 2001
Finally, if your car was first registered prior to March 2001, then things become much simpler. Cars with engines smaller than 1.5 litres pay £220 upfront for 12 months’ tax. If your car’s engine is bigger than that, you’ll pay £360.
Cars first registered before 1 January 1983 are exempt from road tax entirely as they are classed as ‘historic vehicles’.
How do I tax my car?
If you’ve just bought your car, you’ll need to tax it before you drive it. The seller will give you a green slip called a V5C/2, also known as the ‘new keeper slip’. Near the top is a reference number (“Doc. Ref. No.”), which you’ll need to tax the vehicle.
If you’re renewing your road tax, you’ll usually receive a reminder form called a V11. This includes a 16-digit reference number, which you can use along with your vehicle registration to tax the car again.
You can also tax your vehicle using your V5C logbook, which contains both the document reference number and registration details.
If you’ve lost your V5C, our guide explains how to get a replacement logbook.
How to tax a car online
The easiest way to tax your car is online via the DVLA website. You’ll need to enter details from your V5C logbook, V5C/2 new keeper slip, or V11 reminder form. You can pay by debit or credit card, or set up a Direct Debit.
How to tax a car at the Post Office
You can also tax your car at a Post Office, using the same documents. You’ll usually need a valid MOT certificate, unless your vehicle is exempt. You can pay by cash, card, cheque, or Postal Order, or set up a Direct Debit.
How to tax a car over the phone
You can tax your car by calling the DVLA on 0300 790 6802. You’ll need your vehicle registration and a reference number from your V5C, V11 reminder form, or V5C/2 new keeper slip, along with a debit or credit card or Direct Debit details.
Is my car taxed?
You can check if a car is taxed on the official DVLA website. Enter the vehicle registration number, confirm the correct vehicle, and click ‘continue’. You’ll then see whether the car is taxed and if it has a valid MOT.
Can I cancel my car tax and get a refund?
Road tax used to be transferable when a vehicle was sold, but this ended in 2014. Now, when you sell a car, the new owner must tax it themselves, and you can claim a refund for any full remaining months on your tax.
You can also claim a refund if your car is sold, scrapped, stolen, written off, exported, or declared off the road with a SORN. Refunds are issued automatically once the DVLA is notified and are paid for complete months only, usually by cheque sent in the post.
If your refund doesn’t arrive within four weeks, you should contact the DVLA.
Car tax FAQs
Can you tax a car without an MOT?
No. A valid MOT is required to tax a vehicle (unless it is MOT-exempt).
Can you tax a car without insurance?
No. The DVLA checks the Motor Insurance Database, and the vehicle must have at least third-party insurance.
Can you tax a car without a V5C?
Yes, but you’ll need either a V11 reminder or a V5C/2 new keeper slip instead.
When does my car tax run out?
This depends on when you last paid. You can check the expiry date on the DVLA website using your registration number.
Does car tax automatically renew?
Yes, if you pay by Direct Debit. If you pay by card or at a Post Office, it will not renew automatically, but you should receive a reminder.
Has car tax gone up?
VED rates are updated periodically, generally increasing over time in line with government changes, including more recent adjustments affecting electric and low-emission vehicles.
Do I still need a tax disc?
No. Tax discs were abolished in 2014.
Can I drive without tax?
No. Driving without tax can result in fines, enforcement action, and vehicle clamping. Untaxed vehicles can be detected using Automatic Number Plate Recognition (ANPR) systems.
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