Understanding Vehicle Tax Bands and Rates

As a vehicle owner in the UK, it’s essential to understand the different tax bands and rates that apply to your car, van, or motorcycle. These taxes are based on your vehicle’s emissions and value, and they play a crucial role in determining the overall cost of ownership.

In this comprehensive guide, we’ll explore the various tax bands, explain how they’re calculated, and provide insights to help you make informed decisions when purchasing or maintaining your vehicle.

What is Vehicle Tax?

Vehicle tax, commonly referred to as road tax or Vehicle Excise Duty (VED), is an annual tax levied on most vehicles used or kept on public roads in the UK. The amount you pay depends on your vehicle’s CO2 emissions and, in some cases, its engine size or list price. The revenue generated from vehicle tax contributes to the maintenance and improvement of the country’s road infrastructure.

Vehicle Tax Bands Based on Emissions

For cars registered on or after 1st March 2001, the vehicle tax bands are primarily determined by their CO2 emissions. The higher the emissions, the higher the tax rate. Here’s a breakdown of the current tax bands and rates for cars registered from 1st April 2017 to 31st March 2023:

Band A (0 g/km CO2) – £0
Band B (1-50 g/km CO2) – £10
Band C (51-75 g/km CO2) – £25
Band D (76-90 g/km CO2) – £120
Band E (91-100 g/km CO2) – £150
Band F (101-110 g/km CO2) – £170
Band G (111-130 g/km CO2) – £210
Band H (131-150 g/km CO2) – £555
Band I (151-170 g/km CO2) – £895
Band J (171-190 g/km CO2) – £1,345
Band K (191-225 g/km CO2) – £1,910
Band L (226-255 g/km CO2) – £2,245
Band M (over 255 g/km CO2) – £2,635

It’s important to note that these rates apply to vehicles registered from 1st April 2017 to 31st March 2023. Different rates may apply for vehicles registered before or after these dates.

Vehicle Tax Bands Based on List Price

For vehicles with a list price (including VAT) exceeding £40,000, an additional rate of £355 per year is added to the standard rate for the first five years after the vehicle’s first registration. This premium tax rate applies to both petrol and diesel vehicles, regardless of their emissions.

Alternative Fuel Vehicles

Vehicles that run on alternative fuels, such as electricity, biogas, or hydrogen, may be eligible for reduced or zero-rate vehicle tax. For example, fully electric vehicles are currently exempt from vehicle tax, while hybrid vehicles may qualify for lower rates based on their emissions.

Vehicle Tax Rates for Motorcycles

Motorcycles are taxed differently from cars and are subject to a flat rate based on their engine size. The current rates are:

• Up to 150cc – £20
• 151cc to 400cc – £41
• 401cc to 600cc – £62
• Over 600cc – £88

Exemptions and Discounts

Certain vehicles and vehicle owners may be eligible for exemptions or discounts on vehicle tax. These include:

• Vehicles used by disabled persons
• Vehicles registered before 1st April 1976 (historic vehicles)
• Vehicles used for specific purposes (e.g., agricultural vehicles, mobility scooters)
• Discounts for residents of certain areas (e.g., Isle of Man, Channel Islands)

Paying Your Vehicle Tax

You can pay your vehicle tax online, by phone, or at a Post Office branch. Many drivers opt for continuous payment methods, such as Direct Debit or annual renewal, to avoid missing payments and potential penalties.

It’s crucial to keep your vehicle tax up-to-date, as driving an untaxed vehicle can result in significant fines and potential vehicle clamping or impounding.

Making Informed Choices

Understanding vehicle tax bands and rates is essential when considering the purchase of a new or used vehicle. Vehicles with lower emissions and list prices will generally result in lower tax costs, potentially saving you money in the long run. However, it’s also important to consider other factors, such as fuel efficiency, maintenance costs, and your specific driving needs.

By being an informed consumer and considering the long-term costs associated with vehicle ownership, you can make more sustainable and cost-effective choices. Additionally, opting for vehicles with lower emissions can contribute to reducing your carbon footprint and promoting a cleaner environment.

Conclusion

Vehicle tax is an essential aspect of vehicle ownership in the UK, and understanding the different tax bands and rates can help you make informed decisions and budget accordingly. By considering factors such as emissions, list price, and fuel type, you can navigate the vehicle tax system and make choices that align with your needs and financial considerations. Stay informed, plan ahead, and enjoy the freedom of the open road while contributing to the maintenance and improvement of our nation’s infrastructure.