Guide: Road Tax rates explained

In 2008, the Chancellor of the Exchequer, Alistair Darling, announced a number of changes to the vehicle tax – or VED as it is often known.

Some of the changes occurred in May 2009, but many will take effect from April 2010.

What is VED?

VED, or vehicle tax, is exactly what it sounds like. It is a compulsory yearly tax on every vehicle used or kept on a UK public road. For a car to be legally driven, it must have an up to date tax disk on display.

How is VED calculated?

Currently, vehicles are split into 13 different tax bands, labelled A-M, based on the level of CO2 emissions produced by the car.

However, for cars registered before 1 March 2001, there are just two levels of VED, based on the engine size of the car. Any pre-March 2001 registered car with an engine size over 1549cc will pay £205 and any cars with an engine size under 1549cc will pay £125 as of April 2010.

How are CO2 emissions calculated?

Before release, all new vehicles are tested for CO2 emissions. The official CO2 emissions level from each model is used to calculate VED. When buying a new car, the CO2 emissions figure can be found on the V5C vehicle registration document.

What are first year emissions rates?

From April 2010, all newly registered cars will pay first year emissions rates. This means for one year buyers will pay a different set of rates before they revert to the standard rates in the second year. This, says the Government, will emphasise the environmental implications of buying a vehicle with high CO2 emissions.

First year tax rates are as follows:

Band Emissions First year VED rate
A Up to 100g/km £0
B 101-110 £0
C 111-120 £0
D 121-130 £0
E 131-140 £110
F 141-150 £125
G 151-165 £155
H 166-175 £250
I 176-185 £300
J 186-200 £425
K 210-225 £550
L 226-255 £750
M Over 225 £950

VED tax for cars registered before April 2010.

All cars registered after March 2001 and before April 2010 will pay the standard rate of VED tax, depending on the CO2 emissions of the vehicle.

Cars registered after April 2010 will pay standard VED after a year of paying the first year rates.

The standard emissions rates are as follows:

Band Emissions Standard VED rate
A Up to 100g/km £0
B 101-110 £20
C 111-120 £30
D 121-130 £90
E 131-140 £110
F 141-150 £125
G 151-165 £155
H 166-175 £180
I 176-185 £200
J 186-200 £235
K 210-225 £245
L 226-255 £425
M Over 225 £435

What cars can I expect in each band?

The CO2 emissions depend on the engine and model of each individual car. Below is a brief guide on some of the cars available in the three lowest bands.

Band A – Band A cars have emissions under 100g/km and therefore do not pay VED. More cars are being released all the time with sub 100g/km emissions, including the Citroen DS3 and the Vauxhall Corsa 1.3 CTDI Ecoflex.

Band B – Models available in sub-110g/km Band B include city cars such as the Citroen C1 (1.0i VT), Peugeot 107 and Fiat Punto (1.3 16V MultiJet).

Band C – Band C models generally consist of larger city cars or the smaller supermini models. Cars in band C include the Renault Megane Coupe (1.5 dCi), Peugeot 207 (1.4 and 1.6 HDi) and Ford Focus (1.6 TDCi).

Although a few Multi Purpose Vehicles (MPVs) fall into band C, most fall into higher VED bands. The lowest CO2 MPVs include the Citroen Nemo Multispace 1.4 HDi (119g/km) and the Fiat Qubo 1.3 Multijet (119g/km).

Sports Utility Vehicles fall into a wide range of tax bands, although the cleanest models are capable of sub-160g/km. These include the Ford Kuga 2.0 TDCi two-wheel drive (159g/km) and the Volkswagen Tiguan 2.0 TDI two-wheel drive (155g/km).

Currently, Band E (131-140g/km) is the most popular band, down from Band H in 1997. This outlines the trend towards more environmentally friendly vehicles as part of EU regulations which state each manufacturer must have average emissions across their range below 130g/km by 2015.