Car tax rates

All the changes to car tax rates, including the new diesel surcharge

Dominic Tobin
Apr 3, 2018

Car tax went up for most drivers from April 1 this year, and new diesel car buyers saw the steepest increases, thanks to the introduction of a surcharge that adds more than £300 to the cost of a car in some cases.

While the cost of taxing a petrol car in its first year went up in line with inflation, the diesel surcharge resulted in large hikes in car tax, also known as Vehicle Excise Duty (VED), which are designed to penalise anyone buying the most modern diesel cars.

These vehicles now attract a surcharge of between £15 and £520 in the first year only, and manufacturers have already started to pass this on in the price of their cars. For example, the price of most petrol Ford Kugas increased by £5 on April 1, but some diesel models now cost £315 more.

It's the same story with the Volkswagen Tiguan: petrol models have increased in price by £5 to reflect the inflationary increase, while some diesel versions are now £315 more expensive. At the same time, owners of older (and largely dirtier) diesel vehicles will be little affected by the tax changes.

The changes in April make the car tax system even more complicated; the amount that you pay can depend on a vehicle's carbon dioxide (CO2) emissions; when it was first registered as a brand new car; the fuel it uses; and the price when new.

Scroll down for more details on how you'll be affected by the changes, or click below for current and future tax rates

1 Car tax rates for vehicles registered since April 1, 2017

2 Car tax rates for vehicles registered between March 1, 2001 and March 31, 2017

3 Car tax rates for vehicles registered before March 1, 2001

 

Am I affected by the car tax changes?

Most drivers won't notice a major difference. If your car is more than a year old, then you will continue to be taxed under the old system, based on CO2 emissions. The cost will rise in line with inflation, which will be around £5 for many drivers. Drivers who haven't had to pay tax before because their car is extremely efficient (with CO2 emissions of under 100g/km) will continue to benefit from free tax.

If your car is less than a year old, then nothing will change. You'll pay a flat rate of £140 under the new car tax system, which was introduced last April. You may also need to pay a £310 annual surcharge, which applies to all cars with a price of more than £40,000 when new.

 

How is new car tax changing?

The biggest tax changes apply only to brand new cars. Vehicles fall into one one of 13 tax bands, depending on their CO2 emissions and these dictate how much tax is paid in the first year. The greenest electric cars pay no tax and will continue to do so. Tax on mid-range cars ranges from £120 to £500 and the most polluting pay £2000.

At the beginning of April 2018, the first-year tax rose in line with inflation, adding between £5 and £15 to the cost of taxing most cars (at the top end, the increase is £70).

However buyers of almost all diesel cars faced much steeper tax rises. These cars will be pushed up a band, which will add significantly to the cost of taxing them. For example, some versions of the Ford Kuga, VW Tiguan and Land Rover Discovery Sport will cost £315 more to tax.

The first-year tax is usually paid by the car manufacturers, so this is being passed on in the price of the car.

Car tax rates for vehicles registered since April 1, 2017

How much is my car tax?

The current car tax system will probably cost you much more than you would pay for the same vehicle registered before April 2017. That's because it's designed to earn the government an extra £1.4bn a year by 2020. It's split into a first-year rate for brand new cars and then a standard rate for subsequent years.

There are 13 CO2 emissions-based bands that determine the first-year rate of tax - usually paid by car manufacturers. Prices went up in line with inflation from April 1, but it remains free if you have an electric car, or one of the few hydrogen vehicles. You'll pay £165 for a vehicle with CO2 emissions of 120.1g/km: the average for a new car sold today. The most expensive of the 13 emissions bands will cost £2,070 for the first year.

Owners of alternative fuel vehicles, which include hybrids, get a £10 reduction on the cost. However, anyone buying a new diesel car will be bumped up a band for the first year of tax. As you'll see in the table below, this can add hundreds of pounds to the tax bill unless their vehicle complies with next-generation emissions standards. These are due to come into force in 2021, and it's not thought that any diesel car currently meets them. 

In subsequent years, all drivers will pay a flat fee of £140 in car tax, while electric vehicles will remain exempt. Hybrid owners continue to get a £10 discount.

Owners of more expensive cars will also have to pay a wealth tax. This is a £310 surcharge on cars with a list price of £40,000 or more, which brings the annual tax rate to £450. It's imposed for five years - until your car is six years old.

   

Car tax prices

The table below shows the first-year tax rate for new cars bought now. It also shows the standard rate that applies in following years.

Bear in mind that you'll need to add £310 to this standard rate if you have a car priced at more than £40,000 when new. Owners of hybrid and alternative fuel cars should deduct £10 from the first-year tax and the standard rate.

CO2 emissions

Standard rate
(for cars over a year old)

First year rate
(from April 2018)

First year diesel rate
(from April 2018)

0

£0

£0

n/a

1-50

£140

£10

£25

51-75

£140

£25

£105

76-90

£140

£105

£125

91-100

£140

£125

£145

101-110

£140

£145

£165

111-130

£140

£165

£205

131-150

£140

£205

£515

151-170

£140

£515

£830

171-190

£140

£830

£1,240

191-225

£140

£1,240

£1,760

226-255

£140

£1,760

£2,070

over 255

£140

£2,070

£2,070

See the best tax-exempt cars

      

Calculating a car's list price for tax

The list price doesn't include any new car discounts, so you may pay much less than £40,000 for a car, but still be liable for the £310 surcharge. The list price includes:

  • The manufacturer's recommended retail price
  • The full price of any additional factory-fitted options
  • VAT
  • Delivery charges
  • The full cost of the battery in an electric car (if the battery is being leased)

Any options fitted by a dealership, such as car mats, do not count towards the list price. Neither does the first registration fee or any warranty, service or insurance packages, according to the DVLA.

    

Car tax rates for vehicles registered between March 1, 2001 and March 31, 2017

How much is my car tax?

If your car was registered after March 1, 2001 - like most on the road today - then it all depends on how much carbon dioxide it produces. Vehicles that emit an average of 100g or less of carbon dioxide for every kilometre that they drive (100g/km CO2), are exempt from tax. There’s an official CO2 figure for every car produced in the past 15 years.

The rising number of efficient cars, electric vehicles and hybrids, such as the Hyundai Ioniq above, means that many more cars are exempt from road tax. Even so, the majority of cars still produce more than 100g/km CO2. These are are classified into different bands and taxed on a sliding scale, shown in the table below.

If your car is a hybrid, or powered by compressed natural gas (CNG) or liquefied petroleum gas (LPG) then they are taxed as alternative fuel cars. The rates are further down the page.

  

Car tax prices

CO2 emissions in g/km

Tax band

Annual rate
(to April 2018)

Annual rate
(from April 2018)

Up to 100

A

Free

Free

101 - 110

B

£20

£20

111 - 120

C

£30

£30

121 - 130

D

£115

£120

131 - 140

E

£135

£140

141 - 150

F

£150

£155

151 - 165

G

£190

£195

166 - 175

H

£220

£230

176 - 185

I

£240

£250

186 - 200

J

£280

£290

201 - 225

K

£305

£315

226 - 255

L

£520

£540

Over 255

M

£535

£555

  

How much is my car tax for an alternative fuel vehicle?

Alternative fuel cars are powered by something other than petrol or diesel and include hybrids, as well as vehicles that run on compressed natural gas (CNG) or liquefied petroleum gas (LPG). They typically benefit from car tax that’s £10 cheaper than conventionally-powered cars.

CO2 emissions in g/km 

Tax band

Annual rate

Up to 100

A

Free

101 - 110

B

£10

111 - 120

C

£20

121 - 130

D

£105

131 - 140

E

£125

141 - 150

F

£140

151 - 165

G

£180

166 - 175

H

£210

176 - 185

I

£230

186 - 200

J

£270

201 - 225

K

£295

226 - 255

L

£510

Over 255

M

£525

   

Car tax rates for vehicles registered before March 2001

Car tax rates used to be based on engine size. These were replaced by the current regime in March 2001, but still apply to vehicles registered before then.

  • Cars with smaller engines below 1550cc (1.55 litres) pay £145 each year.
  • Cars with larger engines from 1550cc and above pay £235 each year.  

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