Owning and driving a vehicle in the UK comes with a range of taxes, fees, and responsibilities. From Vehicle Excise Duty (VED) to Benefit-in-Kind (BiK) tax, understanding the full scope of car taxation is essential to budgeting, compliance, and sustainability. This updated 2025 guide by UKBloom.co.uk covers all you need to know about car taxes in the UK, including how much you’ll pay, how to check and pay your road tax, and how new changes affect electric vehicles.
What Is Car Tax in the UK?
Car tax, officially known as Vehicle Excise Duty (VED), is a legal requirement for most vehicles used or parked on UK public roads. It’s collected by the DVLA (Driver and Vehicle Licensing Agency) and varies based on a vehicle’s CO₂ emissions, fuel type, and registration date.
Table of Contents
VED 2025: Vehicle Excise Duty Rates Explained
Cars Registered on or After 1 April 2017
| CO₂ Emissions (g/km) | First-Year Rate | Standard Rate (from 2nd year) |
|---|---|---|
| 0 | £0 | £0 (until April 2025) |
| 1–50 | £10 | £190 |
| 51–75 | £30 | £190 |
| 76–90 | £135 | £190 |
| 91–100 | £175 | £190 |
| 101–110 | £195 | £190 |
| 111–130 | £220 | £190 |
| 131–150 | £270 | £190 |
| 151–170 | £645 | £190 |
| 171–190 | £1,040 | £190 |
| 191–225 | £1,565 | £190 |
| 226–255 | £2,220 | £190 |
| Over 255 | £2,745 | £190 |
Additional Charge: If your car costs over £40,000, you’ll pay an extra £410/year for five years after the first registration.
Cars Registered Between 1 March 2001 – 31 March 2017
VED is calculated using 13 emission bands (A–M). For example:
- Band A (up to 100g/km CO₂): £0
- Band C (111–120g/km CO₂): £35
- Band G (151–165g/km CO₂): £240
- Band M (over 255g/km CO₂): £695
Full list: VED band rates on GOV.UK
Electric Vehicle Tax Rules from 2025
Until April 2025, pure electric vehicles (EVs) are exempt from paying VED. But starting 1 April 2025, EV owners will pay:
- First-Year Rate: £10 (if emissions = 0g/km)
- Standard Rate: £190 per year
- Expensive Car Supplement: £410/year for EVs costing >£40,000
This change reflects the government’s effort to balance tax revenue with EV adoption.
Further details: Electric car tax changes – Gov.uk
Company Car Tax (Benefit-in-Kind)
Benefit-in-Kind (BiK) tax applies if your employer provides you a vehicle for personal use. It’s based on:
- Car’s P11D value
- CO₂ emissions
- Fuel type
- BiK percentage rate
BiK Example 2025:
| Emissions (g/km) | Fuel Type | BiK Rate |
|---|---|---|
| 0 | Electric | 2% |
| 1–50 | Hybrid | 5–14% |
| 51–74 | Petrol | 15–19% |
| 75–129 | Petrol | 20–30% |
| 130+ | Petrol | 31–37% |
Calculation: P11D value × BiK rate × your income tax rate.
Use the HMRC Company Car Tax Calculator for accuracy.
How to Check If Your Vehicle Is Taxed
You can check the tax status of your vehicle using:
All you need is the car’s registration number.
How to Pay Car Tax in the UK
Pay your road tax online or at a Post Office:
Online via GOV.UK:
You’ll need:
- 11-digit V5C reference number
- Valid MOT certificate (if applicable)
- Insurance coverage (for UK roads)
Payment Options:
- Annual lump sum
- Monthly Direct Debit
- 6-monthly payments
Car Tax Penalties: What Happens If You Don’t Pay?
Driving without VED is illegal and can result in:
- Penalty fine: £80 (can rise to £1,000)
- Vehicle clamping or seizure
- Court prosecution for persistent offenders
Vehicles not being driven must be declared SORN (Statutory Off Road Notification):
Declare SORN
Internal Links for UK Vehicle Owners
- UK Driving Licence Guide
- Importing a Car to the UK
- UK Vehicle Insurance Basics
- Driving in the UK as a Foreigner
- Road Safety Rules in the UK
Vehicle Tax for Vans and Light Goods Vehicles
Vans < 3,500kg Registered after 1 March 2001:
Flat rate of £320/year for most vans. If registered before 2001, the rate is based on engine size:
- ≤ 1549cc: £200
- > 1549cc: £325
Electric vans will follow car-based EV tax rules from April 2025.
Clean Air Zones and Additional City Charges
Several UK cities charge pollution fees for older, high-emission vehicles:
- London ULEZ: £12.50/day
- Birmingham Clean Air Zone: £8–£50/day
- Bristol, Bath, Bradford: Varying charges
Check your vehicle: UK Clean Air Zones Checker
Car Tax Calculators
Use reliable online tools to estimate your annual tax:
FAQs About UK Car Taxes
Is VED the same as Road Tax?
Yes. Road tax is the informal term for Vehicle Excise Duty.
Do electric vehicles pay car tax?
From April 2025, all electric vehicles will pay standard VED rates like petrol/diesel cars.
What is the Expensive Car Supplement?
Cars costing over £40,000 attract an additional £410/year in tax for five years after the first registration, even if they emit zero emissions.
Can I drive my car immediately after taxing it?
Yes. Once taxed online, your vehicle is immediately recorded on the DVLA database.
Summary of UK Car Tax in 2025
| Vehicle Type | Annual Tax | Notes |
|---|---|---|
| EV (0g/km) | £190 | From April 2025 |
| Petrol/Diesel (low) | £190–£270 | Depends on CO₂ |
| Petrol/Diesel (high) | £645–£2,745 | First-year tax is higher |
| Over £40k Cars | +£410 | Supplement for 5 years post-registration |
| Vans | £320 | Fixed rate |
| Company Cars | Variable | Based on BiK %, CO₂ and P11D value |
Final Thoughts from UK Bloom
Understanding car taxes in the UK is essential for budgeting, compliance, and making eco-conscious decisions. Whether you’re planning to buy a car, drive a company vehicle, or switch to electric, being aware of how taxes apply in 2025 is more important than ever.
Use our free tools, checklists, and calculators in the UK Bloom Driving Resources to stay informed and save money.
Useful External Resources
Disclaimer: This article is for informational purposes only. Always consult the UK Home Office, HMRC, or a tax advisor for personalised advice.
© 2025 ukbloom.co.uk – This article is free to use for personal reference. Republishing without attribution or permission violates our copyright.
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