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29 July 2021

Car tax explained

We show how much car tax you'll need to pay on petrol, diesel, hybrid and electric cars as of April 2021, whether you still need to pay during the coronavirus pandemic, and which cars are exempt from vehicle tax.
Adrian Porter
Car tax

Car tax rates rose again in April 2021, with owners of hybrids, diesels and petrol cars all paying more. 

Electric cars remain exempt from car tax and are not subject to the £40,000 rule, which sees owners of expensive cars pay an extra £335 a year.

Below we lay out everything you need to know about the different vehicle tax rates and rules, and what you'll be paying.

  • Covid-19 update: Do I need to pay car tax during the coronavirus pandemic? In short, yes – unless you register your vehicle as off the road by making a Statutory Off Road Notification, or SORN. For more details see our guide on coronavirus and car tax.

Looking to buy a car? Head straight to our new and used car reviews.

How do the current car tax rules work?

These rules apply to all cars that were first registered after 1 April 2017. 

  • The first-year rate is based on CO2 emissions, broken down into a number of bands.
  • For diesel cars from 1 April 2018, owners are charged a higher first-year rate unless they meet RDE2 emission standards.
  • For all cars registered from 1 April 2020, the first-year rate is likely to be higher than previous years, as official CO2 measurements have risen due to changes in official tests.
  • The standard rate kicks in after the first year. From April 2021, you'll pay £155 for petrol and diesel cars, and £145 for hybrids and alternative fuel cars.
  • Zero-emission cars (such as electric vehicles) are exempt from car tax.
  • If your car cost more than £40,000 when bought new, you have to pay an extra £335 (April 2021 rate, see below) per year for five years, on top of the standard rate.
  • Zero-emission cars are now also exempt from the £40,000 rule as of 1 April 2020. This includes existing owners.
  • New rules are not being backdated to older cars; they will continue along the previous tax system.

Below we explain the post-2017 rules in more detail, or you can skip straight to the table of car tax rates.

Wondering if you should buy an electric car? The worst we've seen are impractical and unreliable, but the best have a decent range and are enjoyable to drive. Find out which electric cars we recommend by checking our round-up of the best electric cars.

How do I check my car's first registration date?

The rate of car tax you'll pay is based on the date the car was first registered, which is why this is important.

The first registration date does not alter with subsequent owners. For instance, a car bought new and registered on 1 July 2016, and then sold to someone else on 1 August 2017, will always have a first registration date of 1 July 2016.

You can find the first registration date in your car's V5C document (your proof of ownership document). But to save you digging that out, the easiest way to check is to go to the DVLA's 'get vehicle information' service and enter your registration.

This free service will reveal the car's first registration date along with other useful information, such as when the MOT is due to expire and the car's European emission status (eg Euro 6).

Car tax rates for cars first registered after 1 April 2017

There are three main rates for cars that were registered as new after 1 April 2017:

  1. The first-year rate is based on the amount of CO2 (carbon dioxide) your car produces, and is higher for any diesel cars that don't meet RDE Act 2/Euro 6d emission levels. Find out more diesel car rates.
  2. After that, a standard rate applies. Petrol and diesel car owners will pay, from April 2021, £155 a year; it's £145 for alternative-fuel cars such as hybrids. This assumes you pay as a single, 12-month payment; rates are a little higher if you pay in instalments.
  3. Owners of cars that cost more than £40,000 have to pay an extra £335 a year in addition to the standard rate, for five years.

What are the current car tax rates?

The table below shows the current car tax rates. These rates apply to cars first registered on or after 1 April 2017.

Vehicle tax rates for petrol and diesel cars from April 2021

CO2 emissions
First-year rate
First-year rate for diesel cars*
Standard rate** from second year onwards
0
£0
N/A
£0
1-50 g/km
£10
£25
£155
51-75 g/km
£25
£115
£155
76-90 g/km
£115
£140
£155
91-100 g/km
£140
£160
£155
101-110 g/km
£160
£180
£155
111-130 g/km
£180
£220
£155
131-150 g/km
£220
£555
£155
151-170 g/km
£555
£895
£155
171-190 g/km
£895
£1,345
£155
191-225 g/km
£1,345
£1,910
£155
226-255 g/km
£1,910
£2,245
£155
Over 255 g/km
£2,245
£2,245
£155

*For diesel cars that do not yet comply with RDE Act 2 (RDE2) emission testing. ** Assumes single 12-month payment

Vehicle tax rates for alternative-fuel cars (hybrids, LPG, CNG, biofuel) from April 2021

CO2 emissions
First-year rate
Standard rate* from second year onwards
0
£0
£0
1-50 g/km
£0
£145
51-75 g/km
£15
£145
76-90 g/km
£105
£145
91-100 g/km
£130
£145
101-110 g/km
£150
£145
111-130 g/km
£170
£145
131-150 g/km
£210
£145
151-170 g/km
£545
£145
171-190 g/km
£885
£145
191-225 g/km
£1,335
£145
226-255 g/km
£1,900
£145
Over 255 g/km
£2,235
£145

*Assumes single 12-month payment.

What is the £40,000 car tax rule?

After the first year, owners of cars that cost more than £40,000 have to pay an additional annual supplement of £335 for five years – adding up to £1,675 in total. 

Vehicle tax rates for cars that cost more than £40,000

Here's what you'll pay for a car costing more than £40,000 during years two to six.

Fuel type
Standard annual rate
Additional rate
Total annual payment
Petrol/diesel
£155
£335
£490
Alternative
£145
£335
£480
Electric/hydrogen (zero emission)
£0
£0
£0

Do you pay car tax on electric cars?

No. Electric cars (and hydrogen fuel-cell cars such as the Hyundai Nexo) are zero-emission vehicles, which are currently exempt from paying any form of car tax.

Electric cars registered before April 2017 are also exempt from car tax.

The £40,000 expensive-car rule, explained above, initially applied to electric cars. So if you bought a new Tesla Model X (an electric car that costs from £75,000), for instance, you used to have to pay this supplement from the second to sixth year of ownership. 

However, it was announced in the 2020 Budget that owners of zero-emission cars bought before 31 March 2025 would no longer have to pay that supplementary rate.

Unusually, this exemption from the supplement also applies to existing owners.

Are hybrid cars cheaper to tax?

The rates are slightly different for owners of alternative-fuel cars. These are vehicles that don't run purely on diesel or petrol, and include:

  • hybrids
  • plug-in hybrids
  • liquefied petroleum gas (LPG) cars
  • compressed natural gas (CNG) cars
  • biofuel cars (bioethanol or biodiesel).

Drivers of alternative-fuel cars pay £10 less than petrol and diesel owners in the first year. They then pay £145 every year after.

How much is car tax for diesel cars?

Anybody who buys a new diesel car that doesn’t comply with RDE Act 2 (RDE2) emission testing pays a higher amount of car tax in the first year of ownership.

New RDE tests came into force in September 2017, but not all new cars had to comply with these new testing procedures until 1 September 2019. Find out more about official tests, and how our tests compare, by going to how we test mpg and emissions.

The rules are not being back dated; they only affect those buying a new diesel car that was first registered on or after 1 April 2018.

Car tax rates for cars first registered before 1 April 2017

Any cars first registered as new after 1 March 2001, but before 1 April 2017, continue to be taxed at their previous, respective rates. These are based on official CO2 emissions.

The amount of CO2 your car produces puts it into one of 13 bands, which are assigned letters A to M. Cars in band A emit the least amount of CO2, and are currently exempt from paying any car tax throughout the life of the car.

The rates below show the current rates, assuming you choose to make a single payment for the year.

Current vehicle tax rates for cars registered pre-April 2017

Low-emission cars (producing up to 100g/km CO2) registered before 1 April 2017 were not liable for car tax. For cars registered from 1 April 2017, this exemption no longer applies.

These rates apply to cars first registered before April 2017. The rates also tend to increase year on year in line with RPI (the retail price index), and have been updated to show the latest April 2021-22 tax-year rates. 

Car tax band
CO2 emissions
First-year rate
Annual rate after first year
A
Up to 100g/km
£0
£0
B
101-110g/km
£0
£20
C
111-120g/km
£0
£30
D
121-130g/km
£0
£130
E
131-140g/km
£130
£155
F
141-150g/km
£145
£170
G
151-165g/km
£185
£210
H
166-175g/km
£300
£250
I
176-185g/km
£355
£275
J
186-200g/km
£500
£315
K
201-225g/km
£650
£340
L
226-255g/km
£885
£585
M.
Over 255g/km
£1,120
£600

*Band K includes cars that have a CO2 figure of more than 225g/km but were registered before 23 March 2006. Annual rate after first year assumes single 12-month payment. You can choose to set up a direct debit to pay monthly, or pay a single payment every six months. But if you choose either of these options, you will end up paying more compared with a single payment for 12 months.

Previous tax rates for alternative-fuel cars

Alternative-fuel cars are those that don't run purely on diesel or petrol, such as hybrids.

The car tax rates for alternative-fuel cars registered before 1 April 2017 are £10 less than for regular petrol or diesel combustion cars; to get the rate for your car, deduct £10 from the rate in the table.

Cars registered before 1 March 2001

These car tax rates apply to cars registered from 1 March 2001. Cars registered before this date are charged based on their engine size; as of April 2021, those with engines smaller or equal to 1549cc now pay £170 a year, and those with larger engines pay £280 a year.

A rolling 40-year car tax exemption for classic vehicles applies from 1 April 2015. It means any vehicle built 40 or more years ago will be exempt from car tax on an automatic rolling basis on 1 April each year.

If you're deciding between a petrol or a diesel car, our petrol or diesel calculator will tell you which will cost you less.

Am I better or worse off under the post-2017 system?

To show how the post-April 2017 car tax system compares with the previous one, we've compared rates on a selection of cars with CO2 levels ranging from low to high. 

All cars are for example purposes only, and some have greener engines available. All models listed cost less than £40,000.

Loss or gain

Under the current car system, the loss or gain compared to the previous car tax system. 

Car model
CO2 emissions
Loss or gain after one year
Loss or gain after five years
Loss or gain after 10 years
Toyota Prius Plug-in hybrid*
28 g/km
-£10
-£590
-£1,315
VW Up
95 g/km
-£140
-£760
-£1,535
Honda Civic
128 g/km
-£180
-£280
-£405
Skoda Kodiaq
155 g/km
-£370
-£150
£125
Ford Ranger (double cab)
231 g/km
-£1,025
£695
£2,845

Table notes: Correct as of June 2021. Uses current WLTP CO2 figures. *Alternative-fuel rates apply.

Car rates pre and post April 2017

We look at first and second year rates for cars registered before and after April 2017.

Car model
CO2 emissions
First-year rate (registered before April 2017)
Second-year rate (registered before April 2017)
First-year rate (registered after April 2017)
Second-year rate (registered after April 2017)
Toyota Prius Plug-in hybrid*
28 g/km
£0
£0
£10
£145
VW Up
95 g/km
£0
£0
£140
£155
Honda Civic
128 g/km
£0
£130
£180
£155
Skoda Kodiaq
155 g/km
£185
£210
£555
£155
Ford Ranger (double cab)
231 g/km
£885
£585
£1,910
£155

Table notes: Correct as of June 2021. Uses current WLTP CO2 figures. *Alternative-fuel rates apply.

Excluding zero-emission cars, on which you pay no tax at all, lower-emission cars tend to have relatively higher tax rates (for the same car type) under the new system from the outset. Owners of higher-emission cars pay more in the short term, but might be better off in the longer term. 

For example, under the current system and applying the latest rates (from April 2021), you would pay £1,315 of car tax over 10 years for the the Toyota Prius Plug-in hybrid. The cleanest car in the table, it has a remarkably low CO2 figure of just 28g/km. 

Under the previous system, it would have been exempt from car tax thanks to its low emissions.

The Skoda Kodiaq has a CO2 figure that's 5.5 times higher than the Prius plug-in hybrid, officially emitting 155g/km of CO2. Under the current system, its owners will pay £1,950 over 10 years, noticeably more than for the Prius Plug-in. 

However, under the older system, owners would end up paying £125 less over the same period, meaning that anyone buying a more polluting car today actually saves money on what they would have paid under the pre-2017 car tax system.

The more polluting the car, the higher the saving compared with the older car tax system.

The Ford Ranger's CO2 figure of 231g/km is more than eight times higher than for the Prius plug-in hybrid. Under the current system, owners will pay £3,305 over 10 years. But that's still a saving of £2,845 compared with what owners of an equally polluting car would pay if it was first registered before April 2017.

For those buying a high-polluting car under the current system, you'll pay more on car tax compared with a low-polluting car. But you'll still save money compared with the previous tax system – thousand of pounds if you're buying a very polluting car.

Those buying a low-emission vehicle might pay less compared with those buying high-polluting cars, but owners are comparatively worse off if they buy a newer, cleaner low-emission car that was first registered after April 2017.

Did car tax rates go up more than usual in April 2020?

No, they didn't – but the bands changed, so some car owners might have found themselves faced with a hefty increase. That's because of changes to the way CO2 is measured. 

The result is that someone buying a new car first registered from April 2020 could have found themselves paying substantially more car tax in the first year compared with someone who bought exactly the same car just before April 2020. 

As of April 2020, first-year car tax is calculated based on Worldwide Harmonised Light Vehicle Test Procedure (WLTP) test results for CO2 emissions. Previously, it was calculated on the less-representative New European Driving Cycle (NEDC) test, which gave less realistic (and typically lower) CO2 emissions. 

We explain the differences between both sets of official tests, plus how our own tests compare, in our guides to how we test mpg and emissions. In a nutshell: WLTP tests are much more true to real-life driving conditions.

First-year car tax rates, which are based on official CO2 emissions, were adjusted for the change. 

As an example, if testing had continued under the old, NEDC test, which measured a car as producing 135g/km CO2, the owner would have paid £215 in their first year.

However, if that same car was bought just after April 2020 and its official CO2 output had been adjusted to 155g/km following the adoption of WLTP CO2 values, the owner of that same car would have had to pay £540 as it moved up to the next band. That's an increase of £325.

The standard rates that apply from the second year of a car's life onwards are unaffected.

How can I pay for my car tax?

Arguably the easiest way is to set up a direct debit. You can make annual, six-monthly or monthly payments; there is 5% surcharge for those paying every six months or monthly.

You can also pay by cash, debit or credit card, cheque or postal order in some post offices. If so, you will need to bring one of the following:

  • V5C log book (or V5C/2 if it's a new car)
  • V11 form.

In addition to one of the documents above, you also need to bring:

  • a valid MOT certificate
  • a valid Exemption Certificate (if you claim disabled vehicle tax).

If you live in Northern Ireland, you’ll also need valid paper copy of either your current certificate of insurance or a cover note.

Alternatively, you can phone the DVLA to pay your car tax. The phone number is 0300 790 6802.

What if I don't pay my car tax?

If you don't pay your car tax, initially you'll get a letter in the post accompanied by an £80 fine (although this should be halved if you pay quickly enough).

If you continue not to pay, the fine could rise to a hefty £1,000 – plus court fees should it go to court. It's illegal to drive without car tax, and the police can issue you a Fixed Penalty Notice of £1,000 if they stop you and find you haven't paid it.

Do I need a tax disc?

Since 1 October 2014, you are no longer required to display a tax disc in the windscreen of your car.

This did not, sadly, mean the end of annual car tax, but it does have implications for buying and selling cars.

  • If you buy a used car, you can no longer transfer any remaining car tax, so you need to tax the car before you can use it.  
  • If you sell a car, you will get an automatic refund for any remaining car tax – as long as you have notified the DVLA of the sale.

However, you will only be refunded for any full calendar months remaining. That means if you sell your car one week into the month, both you and the new owner will effectively have to tax it for the remainder of that month.

Is car tax the same as road tax?

Road tax per se doesn't exist, as car tax goes towards more than just the upkeep of roads. However, understandably, a lot of people search for it when they're looking for car/vehicle tax or, to use its official name, Vehicle Excise Duty (VED).

The UK government website commonly refers to vehicle tax.

Now you're up-to-date with the new car tax rules, go to our car reviews for our independent test results and expert research.