A complete guide on how to tax a car
June 03, 2025 by Siobhan Doyle
Looking for information on road tax or Vehicle Excise Duty (VED)? This guide covers everything you need to know.
Road tax, officially known as Vehicle Excise Duty, is a fact of life for the majority of motorists, with this annual levy applying to all new cars, most used ones, electric cars, historic vehicles, and the cars of people in receipt of certain benefits.
But how do you go about taxing a car? How do you actually buy road tax, and how much will you need to pay for your vehicle? Our guide details all this, and more.
What is car tax?
Car tax, often called road tax, is a levy the Government charges to people who run cars. Originally called the Road Fund Licence and intended to finance highways, the lines of what road tax pays for have become more blurred over the years, but regardless of whether Vehicle Excise Duty goes towards hospitals, schools, pensions or motorway expansion, the name 鈥榬oad tax鈥 has stuck,聽 and it鈥檚 mandatory for the vast majority of cars, with payments taken annually, bi-annually or monthly.
Road tax payments are managed by the Driver and Vehicle Licensing Agency (DVLA) which also administers vehicle registrations and private number-plate sales. But while DVLA administers road tax and sends out reminder letters, the money that鈥檚 collected actually goes into something called the Consolidated Fund, which is described by the UK Parliament as 鈥渢he Government鈥檚 general bank account at the Bank of England鈥.
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Do I need car tax?
Most probably. There鈥檚 only one type of car that鈥檚 exempt from being taxed. Any car more than 40 years old doesn鈥檛 pay, as this means that it now has 鈥渉istoric vehicle鈥 status. Previously, electric vehicles were exempt from first-year road tax, the ongoing annual charge and the Expensive Car Supplement 鈥 but now anyone buying a new electric, zero, or low-emission car will have to pay the first-year rate of 拢10. Then, from the second tax year onwards, the charge will rise to the standard rate of 拢195.
People in receipt of certain disability benefits are exempt from paying road tax, too, so if you get the higher rate mobility component of the Disability Living Allowance (DLA), the enhanced rate mobility component of Personal Independence Payment (PIP), the higher rate mobility component of Child Disability Payment, the War Pensioners鈥 Mobility Supplement, the Armed Forces Independence Payment or the enhanced rate mobility component of Adult Disability Payment (ADP), you should be able to claim exemption from road tax; this, perhaps counterintuitively, should be done by .
As an aside, if you receive one of the benefits listed above, you may also qualify for a car on the Motability scheme.
You can also make a statutory off-road notification, or SORN, if you are not using the car for an extended period 鈥 though as the name suggests, the car must be kept off the road (IE on private land, not parked on the street) unless you tax it again.
How much does car tax cost?
The most common amount of road tax people pay is 拢195, although this can vary enormously, as there are three road-tax regimes in existence exist (each of which we detail below) depending on when your car with first registered.
The current road-tax regime was introduced on 1 April 2017, and applies to cars first registered from that date.
If your car was registered between 1 March 2001 and 31 March 2017, you鈥檒l pay road tax according to a different set of rules, while a third regime applies to cars first registered prior to March 2001.
The amount of road tax that鈥檚 due tends to increase each April in line with inflation, with the most recent rise being implemented in April 2023.
Cars first registered on or after 1 April 2017 鈥 road-tax system from 1 April 2025
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
- A 鈥榣uxury car 蝉耻辫辫濒别尘别苍迟鈥, which applies to cars costing 拢40,000 or more and runs from years two (IE after the first, CO2-based annual charge) to years six of a car鈥檚 life.
These rates were updated in the Autumn 2024 budget, and are now in effect.
First-year road tax costs
As highlighted above, this is a one-off payment that鈥檚 determined by a car鈥檚 CO2 emissions and is typically bundled in a new car鈥檚 鈥榦n-the-road鈥 price when you buy the car. This scale sees more polluting cars (which typically have larger, more powerful engines and cost more to buy) incur higher road-tax costs.
| CO2 emissions (g/km) | First-year cost |
| 0 | 拢10 |
| 1-50 | 拢110 |
| 51-75 | 拢130 |
| 76-90 | 拢270 |
| 91-100 | 拢350 |
| 101-110 | 拢390 |
| 111-130 | 拢440 |
| 131-150 | 拢540 |
| 151-170 | 拢1,360 |
| 171-190 | 拢2,190 |
| 191-225 | 拢3,300 |
| 226-255 | 拢4,680 |
| >255 | 拢5,490 |
Second-year onwards road tax cost and 鈥luxury car 蝉耻辫辫濒别尘别苍迟鈥
After you鈥檝e paid the car鈥檚 first year of road tax, you鈥檒l be liable for a fixed annual payment of 拢195 from the second year and thereafter.
There鈥檚 also an 鈥榣uxury car 蝉耻辫辫濒别尘别苍迟鈥 which costs an additional 拢425 and applies to cars that cost 拢40,000 or more (after options, so a 拢39,999 car with a 拢2 optional extra attracts this supplement) when new. This tax runs from the second to the sixth year of an expensive car鈥檚 life, for an annual cost of 拢620 over that period, after which tax reverts to 拢195 a year.
Note these costs assume you pay for your road tax annually. If you pay every six months, there鈥檚 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鈥檚 ULEZ.
| CO2 emissions (g/km) | Yearly cost |
| <100 | 拢20 |
| 101-110 | 拢20 |
| 111-120 | 拢35 |
| 121-130 | 拢165 |
| 131-140 | 拢195 |
| 141-150 | 拢215 |
| 151-165 | 拢265 |
| 166-175 | 拢315 |
| 176-185 | 拢345 |
| 186-200 | 拢395 |
| 201-225 | 拢430 |
| 226-255 | 拢735 |
| >255 | 拢760 |
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 拢220 upfront for twelve months鈥 tax. If your car鈥檚 engine is bigger than that, you鈥檒l pay 拢360.
Cars first registered before 1 January 1983 are exempt from road tax entirely as they are classed as 鈥榟istoric vehicles鈥.
How do I tax my car?
If you鈥檝e just bought your car, you need to tax it right away. The seller will have given you a green slip called a V5C/2, more commonly known as the 鈥榥ew keeper slip鈥. Near the top of it is a reference number (鈥淒oc. Ref. No.鈥), which you will need to pay your road tax.
If you already own the car you should receive a road-tax reminder form (called 鈥榁11鈥) close to renewal time, which will contain a 16-digit reference number; this, together with the car鈥檚 registration, can be used to re-tax the vehicle.
You can also use your car鈥檚 V5C logbook, gleaning the 鈥榙ocument reference number鈥 and vehicle registration from this.
If you鈥檝e lost your V5C, our guide details how to get a new logbook.
How to tax a car online
The easiest way to tax your car is to use the internet; simply head聽 and follow the instructions, entering the details from whatever paperwork detailed above you have. You鈥檒l need a credit or debit card, or you can set up a Direct Debit.
How to tax a car at the Post Office
Again, you鈥檒l need one of the documents set out above, but in addition you will need a valid MOT certificate, or if you鈥檙e claiming an exemption from having to pay road tax you will need an exemption certificate. You can pay via cash, cheque, card, Postal Order, or set up a Direct Debit if taxing your vehicle at a Post Office.
How to tax a car over the phone
If you would rather pay for your road tax over the phone you should on 0300 790 6802; again, you鈥檒l need an electronic payment method or can set up a Direct Debit, plus you鈥檒l have to have the vehicle registration and a code from your V5C logbook, a V11 reminder form, or the new-keeper slip if you鈥檝e just bought the car.
Is my car taxed?
You can find out if a car is taxed on the . Simply enter the car鈥檚 registration, confirm the correct vehicle has been identified and hit 鈥榗ontinue鈥. You鈥檒l be told if 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 transferable over to the new owner of a car when a vehicle was sold second-hand, but this practice ended in 2014. Now, the new owner must buy road tax afresh, leaving you to claim for a refund if you鈥檝e sold the car midway through its taxation period.
You can also claim a road-tax refund for tax that鈥檚 been already paid in advance if your car is stolen, exported out of the UK, scrapped, written-off following an insurance claim or has been taken off the road by way of a SORN declaration.
Refunds are only paid for complete months, are issued automatically if you tell the DVLA any of the above situations has arisen, and arrive as cheques, sent in the post.
If your road tax refund doesn鈥檛 arrive within four weeks, you should .
Car tax FAQs
Can you tax a car without an MOT?
No: your car must have a valid MOT in order for you to tax it.
Can you tax a car without insurance?
No: the DVLA checks its Motor Insurance Database when someone goes through the road-tax-payment process, and tax won鈥檛 be issued if the car is not insured with at least the legal minimum third-party insurance.
Can you tax a car without the V5C?
While you can tax a car without a V5C logbook, you鈥檒l have to have either a road-tax reminder, or a new-keeper slip instead.
When does my car tax run out?
When a car鈥檚 tax runs out depends on when the tax was paid for, and whether you paid annually, biannually or monthly. To find out when your tax is due to run out simply head to the and enter the car鈥檚 registration 鈥 this will inform you if the car is taxed, and when the tax runs out, if it is.
Does car tax automatically renew?
If you pay by Direct Debit then yes, your road tax will renew automatically. If you pay by debit or credit card, or by cash at a Post Office, it will not renew automatically 鈥 though you should get a reminder letter, complete with the reference code you can use when renewing.
Has car tax gone up?
The Autumn 2024 budget ushered in wide-ranging changes to VED, especially on electric cars which had previously been exempt. Rates for all vehicles increased, dramatically so for the most polluting cars.
Do I still need a tax disc?
No. Tax discs haven鈥檛 been mandatory since October 2014.
Can I drive without tax?
No. If you鈥檙e caught driving without tax you can be fined 拢1,000 or five times the amount of tax outstanding 鈥 whichever is greater. Your car can also be clamped, with additional release fees then due. DVLA enforcement teams travel around the country with Automatic Number Plate Recognition (ANPR) cameras, which can detect untaxed cars, while the organisation partners with police forces and local councils to catch untaxed cars and their drivers.
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