Car tax bands – what are they?

If you use your car on public roads, you’ll need to pay car tax – but how much does it cost? Here, comparison site for cheap insurance quotes, mustard.co.uk, explain the different car tax bands, what they mean and how it all works.

What is a car tax band?

Car tax bands set out how much you’ll need to pay in car tax (or vehicle excise duty, VED as it’s officially called). However, it’s not quite as simple as having one list and car tax bands are different depending on when your car was registered and the amount of CO2 it emits.

How do I know what tax band my car is in?

You’ll need to check when your car was registered as this will help you work out which banding system will apply.

Cars registered on or after 1 April 2017

If your car was registered after April 2017, you’ll pay a ‘first-year’ rate based on its CO2 emissions. After this, you’ll pay the ‘standard rate’ which currently costs £165 for petrol and diesel cars.

Alternative fuel cars (hybrids, bioethanol and LPG cars) pay £10 less, for example, a hybrid with CO2 emissions up to 50g/km will pay nothing for the first year and £155 from the second year onwards.

It’s also important to know that if your car had a list price of more than £40,000 when you bought it, you’ll be expected to pay an additional ‘expensive car supplement’ which is currently £355. You’ll need to start paying this amount after the first year of registration (so from year two onwards) and it’s payable for five years.

Cars registered between 1 March 2001 and 31 March 2017

The amount of car tax you’ll need to pay is also based on CO2 emissions but the banding is slightly different to newer cars. There’s also no first or standard rate, it’s just one amount per band (alternative fuel cars also pay £10 less per band).

Cars registered before 1 March 2001

There are only two tax bands for these cars which are based on engine size. If your car’s engine is under 1549cc, annual car tax will cost you £180 or £295 for cars with engines over 1549cc.

Do electric cars pay car tax?

At the moment, zero emission cars like electric vehicles (EVs) are exempt from car tax so you won’t pay anything. However, the government plans to change this in April 2025 when EV owners will have to start paying VED.

What happens if I don’t pay car tax?

If you don’t pay your car tax, you can be fined up to £80, although this could be cut to £40 if you pay within 33 days. If you don’t pay the fine, your details could be given to a debt collection agency. Your car can also be clamped or destroyed.

If you know you won’t be driving your car for a while and are keeping it on private land, you can apply for a statutory off road notification (SORN). You can apply for free online and it also means you’ll be refunded any full months of car tax you have left (for example if you have three and a half months of car tax left, you’ll be refunded for the three full months only).

How do I pay for car tax?

The quickest way to buy car tax is online at GOV.UK. You can pay for the full 12-months in one go (the cheapest option) or you can pay in monthly instalments by Direct Debit (this works out slightly more expensive).

Don’t forget that to tax your car, you’ll also need a valid MOT if the car is over three years old, it must also be insured.

If your car cover is also up for renewal, you can compare quotes at mustard.co.uk where you’ll find deals from leading UK insurers. Simply start your quote online or speak to a member of their team on 0330 022 8825.