Car tax explained

The 2023 Autumn Statement revealed the car tax rates for all owners from 1 April 2024.

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. From April 2024, you pay £190 for petrol and diesel cars, £180 for hybrids and alternative fuel cars.
• Zero-emission cars (such as electric vehicles) are exempt from car tax until 2025. After 2025, electric car owners will pay both a first year rate, and then the standard rate that owners of petrol and diesel cars currently pay.
• If your car cost more than £40,000 when new, you have to pay an extra £410 (April 2024 rate, see below) a year for five years, on top of the standard rate.
• Zero-emission 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.

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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 (e.g. Euro 6).

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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 will pay, from April 2023, £190 a year; it's £180 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 £410 a year in addition to the standard rate, for five years.

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 for petrol and diesel cars from April 2024

* Assumes single 12-month payment

Vehicle tax rates for alternative-fuel cars (hybrids, LPG, CNG, biofuel) from April 2024

*Assumes single 12-month payment.

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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 £410 for five years – adding up to £2,050 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.

Do you pay car tax on electric cars?

Not yet, although that will change come 2025.

Electric car rates prior to 1 April 2025

Electric cars (and hydrogen fuel-cell cars such as the Hyundai Nexo) are zero-emission vehicles and exempt from paying car tax.

In the 2020 Budget, owners of zero-emission cars were told they would no longer face the £40,000 expensive car rule and supplement. But the 2022 Autumn Statement said this will only apply to cars first registered on or before 31 March 2025.

Electric car rates from 1 April 2025

Electric cars first registered on or after 1 April 2025: will pay the lowest rate of tax (first year rate), currently £10.

From the second year on, the standard rate kicks in and owners will need to pay £190 a year - the same rate petrol and diesel owners pay today (if they have a car first registered after 1 April 2017).

If the electric car costs £40,000 or more when new, the expensive car supplement will be added to the standard rate for five years.

As it adds to the standard rate, you will pay a supplementary rate during years two to six of ownership. Based on on today’s rates, that would mean electric car owners would pay an extra £410 on top of the standard rate of £190, to spend a total of £600 per year, for years two to six of ownership, before dropping back down to the standard rate from year seven of ownership and on.

Electric cars first registered between 1 April 2017 and 31 March 2025: will also pay £190 per year from April 2025.

The £40,000 expensive car supplement is not being backdated, so an electric car first registered in 2024, for example, will not have to pay the supplementary rate of £410 on top of the standard rate from April 2025.

Electric cars first registered between 1 March 2001 and 31 March 2017: in effect, electric cars started coming to the mainstream market around 2010.

But for those who have an electric car registered before 31 March 2017, owners will be eligible to pay the ‘band B rate’ as listed below, which is £20 a year for the 24/25 tax year.

Are hybrid cars cheaper to tax?

The rates are slightly different for owners of alternative-fuel cars, although this also seems set to end as of 1 April 2025 with the government saying rates will be equalised.

Alternative-fuel cars are those 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 currently pay £10 less tax than owners of petrol and diesel cars in the first year they are registered. They then pay £170 every year after.

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 exempt from paying any car tax throughout their life.

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 does not apply.

These rates apply to cars first registered before April 2017. The rates tend to increase year on year in line with RPI (the retail price index), and have been updated to show the latest April 2024-25 tax-year rates. 

*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 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 pay 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 before 1 March 2001. Cars registered before this date are charged based on their engine size; as of April 2024, those with engines smaller or equal to 1549cc now pay £210 a year, and those with larger engines pay £345 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.

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

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 a 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 123 4321.

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 (halved if you pay within 28 days).

If you continue not to pay, the fine 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 and seize your car.

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 mean the end of annual car tax, but 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.

You will only be refunded for any full calendar months remaining. 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.