Car tax explained

The 2024 Autumn Budget revealed the car tax rates for all owners from 1 April 2025.

Here's what you need to know about the vehicle tax rates and rules, and what you'll pay now and in future.

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How do the current car tax rules work?

The rules apply to all cars first registered after 1 April 2017. 

• The first-year rate is based on CO2 emissions, broken down into a number of bands.
• The standard rate kicks in after the first year. You currently pay £195 for all cars that aren't electric or hydrogen.
• Zero-emission cars pay both a £10 first year rate, and then the £195 standard rate that owners of petrol and diesel cars will then pay.
• If your car cost more than £40,000 when new, you have to pay an extra £425 (April 2025 rate, see below) a year for five years, on top of the standard rate.
• Zero-emissions cars were exempt from the £40,000 rule as of 1 April 2020. But for new electric cars registered after 1 April 2025, owners will need to pay this supplementary rate.
• 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.

Should you buy an electric car? The worst are impractical and unreliable, but the best have a decent range and are fun to drive.  Find the models we recommend in our guide to the best electric cars

Car tax rates for cars first registered after 1 April 2017

The main rates for cars registered as new after 1 April 2017:

1. The first-year rate is based on the amount of CO2 (carbon dioxide) your car produces.
2. After that, a standard rate applies. Petrol and diesel car owners pay £190 a year; it's £180 for alternative-fuel cars such as hybrids (although this discount ends from 1 April 2025). This assumes you pay a single payment for the whole year; rates are a little higher if you pay in instalments.

What are the current car tax rates?

These are the current car tax rates, which apply to cars first registered on or after 1 April 2017.

Vehicle tax rates

* Assumes single payment for the whole year

What is the £40,000 car tax rule?

After the first year, owners of cars with a list price (excluding any discounts) of more than £40,000 have to pay an additional annual supplement of £425 five years. This will continue to apply even if you buy a used car that had a new list price of more than £40,000

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.

Do you pay car tax on electric cars?

Electric cars (and hydrogen fuel-cell cars) were previously exempt from tax, but as we explain below, that's changed.

Electric car tax rates from 1 April 2025

Electric cars first registered on or after 1 April 2025: You'll pay the lowest rate of tax, currently £10. From the second year, the standard rate kicks in and you'll need to pay £195 a year, the same as petrol and diesel owners pay now (if they have a car first registered after 1 April 2017). If your electric car cost £40,000 or more when new, the expensive car supplement will be added to the standard rate for five years.

Electric cars first registered between 1 April 2017 and 31 March 2025: You'll pay £195 per year from April 2025. The £40,000 expensive car supplement is not backdated, so an electric car first registered in 2024 will not attract the supplementary rate of £410 on top of the standard rate.

Electric cars first registered between 1 March 2001 and 31 March 2017: You'll pay the band A rate as listed below, which is £20 a year for the 2025/26 tax year.

Are hybrid cars cheaper to tax?

The rates used to be slightly different for owners of alternative-fuel cars, although this ended on 1 April 2025 when the rates were equalised.

Alternative-fuel cars, which don't run purely on diesel or petrol, include:

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

Car tax rates for cars first registered before 1 April 2017

Most cars first registered as new after 1 March 2001, but before 1 April 2017, continue to be taxed at their previous, respective rates, which usually rise in line with official inflation figures each year. 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. 

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

Tax rates for older alternative-fuel cars

Alternative-fuel cars registered between 1 April 2017 and 31 March 2025 will pay the same £195 rate as petrol and diesel cars.

Alternative-fuel cars registered between 1 March 2001 and 31 March 2017 will pay £20 a year.

Cars registered before 1 March 2001

Cars registered before this date are charged based on their engine size. Those with engines smaller or equal to 1,549cc pay £220 a year, and those with larger engines pay £360 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 guide to petrol vs diesel cars will tell you which will cost you less.

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.

This date doesn't alter with subsequent owners. A car bought new and registered on 1 July 2016 then sold to someone else on 1 August 2017, will always have a first registration date of 1 July 2016.

You can find this date in your car's V5C document (proof of ownership document) but the easiest way to check is to visit the DVLA's 'get vehicle information' service and enter your registration.

This free service also shows other useful information, such as when the MOT is due to expire and the car's European emission status (eg Euro 6).

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 a 5% surcharge for paying every six months or monthly.

It's easy to pay your car tax online on the government's website.

Alternatively, you can 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 a valid paper copy of either your current certificate of insurance or a cover note.

Anyone in the UK can phone the DVLA to pay for car tax on 0300 123 4321.

If you are disabled and claim certain benefits, you can register for a reduction or exemption from car tax, but only for one vehicle you use. You can claim the exemption by visiting a Post Office branch although to get a reduction needs to be done by post.

What if I don't pay my car tax?

If you don't pay your car tax, initially you'll get a letter accompanied by an £80 fine (halved if you pay within 28 days).

If you continue not to pay, that could rise to £1,000 (or five times the due car tax, whichever is greater) – 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 (FPN) and seize your car.

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.