Car Tax (VED) Explained: Rates, Bands and Who Pays

Car tax, formally Vehicle Excise Duty (VED) and often called road tax, is a yearly charge for using a vehicle on public roads. The rules depend on when the car was registered. This guide covers the current rates and how they work.

Cars registered on or after 1 April 2017

These cars pay in two stages:

• First-year rate. Set by the car's CO2 emissions, paid when it is first registered, usually as part of the buying cost. A new electric car pays a first-year rate of £10.
• Standard rate. From the second year on, most cars pay the standard rate, which is £200 a year for 2026/27, up from £195. If you pay by monthly Direct Debit, the annual total is about £210.

The expensive car supplement

Cars with a list price above £40,000 pay an extra £440 a year for five years, starting in the second year. For electric cars, the threshold is £50,000, so an electric car above that pays £640 a year in total (£200 plus £440).

Cars registered between March 2001 and March 2017

These cars are taxed by CO2 emissions band, from band A to band M. Annual rates in 2026/27 range from about £20 for the lowest-emission bands to £790 for band M. Check your car's band and the exact rate on GOV.UK.

Electric cars

Electric cars used to be exempt. Since April 2025 they pay VED, at the first-year rate then the standard rate, as above. Pay-per-mile charging is planned from April 2028. See electric car tax: VED and pay-per-mile.

How to pay

• Pay on GOV.UK, using the 11-digit number on your vehicle log book (V5C) or the reminder letter. Beware of unofficial sites that charge extra.
• Choose annual, six-monthly or monthly Direct Debit.
• Tax is not transferable. If you buy a used car, you must tax it before you drive it.
• If you sell a car, you get a refund for any full months left, which the DVLA normally pays automatically.

SORN

If a car is off the road and not used or parked on a public road, you can declare it SORN (Statutory Off Road Notification) and stop paying tax. Driving or parking it on a public road without tax can lead to a fine.

Common mistakes

• Assuming the tax carries over to the new owner.
• Missing the renewal date. The DVLA checks automatically with cameras and records, and fines can be high.
• Paying through a third-party site that adds a fee.

Does it matter when you buy?

The standard rate does not change with the month, but the first-year rate does depend on emissions. See how much it costs to run a car for where car tax fits in the total.

Rates are as reported for 2026/27 in November 2026. Always check the current rates and your own car on GOV.UK before paying.