Which? uses cookies to improve our sites and by continuing you agree to our cookies policy.

Ask an expert: ‘How do I work out how much vehicle excise duty I pay?’

New rules mean your car tax is based on the vehicle's 'list price'

Every week, our money experts answer your financial queries. You can submit your questions to money-letters@which.co.uk, or via our Facebook or Twitter pages.

Q. I understand that the vehicle excise duty for cars with a list price over £40,000 will now carry a supplement of £310. But I’m not clear on exactly what is meant by ‘list price’. The dealer seems to offer all manner of headline rates, discounts and on-the-road prices, and I don’t know whether VAT is included or not. Which is correct?

Huw Robson, Cheddar

A. Changes to vehicle excise duty came into effect on 1 April 2017. Existing car owners will continue to pay the old rates, but for cars registered on or after 1 April 2017 there will be a first year of charges linked to carbon emissions.

After that there will be three bands which will determine how much duty you pay each year – one for petrol and diesel cars, one for alternative fuel vehicles (hybrids, bioethanol and LPG cars) and one for cars with zero CO2 emissions.

As you say, after the first year of emissions-linked charges, owners of cars with a list price of more than £40,000 will now pay a supplement of £310 for five years, on top of the standard rate of £140 a year. The rules state that the list price is the published price before any discounts.

Bear in mind that you can’t include any government grants that might apply if your chosen vehicle has ultra-low emissions.

New car tax rules in a nutshell

These rules affect all cars registered as new after 1 April 2017.

In the first year of ownership, the amount of tax you pay is based purely on your car’s CO2 emissions. The chart shows how much you’ll pay.

After the first year, a rate of £140 kicks in for petrol and diesel cars. For hybrids and alternative fuel cars, you pay £130.

If your vehicle’s ‘list price’ is over £40,000, you’ll pay a surplus of £310 for the next five years of ownership. Zero emission vehicles (like electric cars) are exempt from car tax, but still subject to the £40,000 rule.

Our car tax guide details exactly what you’ll pay based on your car’s emissions, list price and when it was bought.

Back to top