Car Tax Guide UK (VED Rates, Bands, Exemptions 2026)

What Is Vehicle Excise Duty (VED)

Vehicle Excise Duty is an annual tax that must be paid on most motor vehicles used or kept on UK public roads. It applies to cars, motorcycles, vans, lorries, and buses, with rates varying by vehicle type and emissions. VED was introduced in its current form in 2001, with increasingly stringent emissions-based banding added in later years. You must tax your vehicle even if you do not drive it, as long as it is parked on a public road. If you keep the vehicle off-road (on private land), you must make a Statutory Off Road Notification (SORN). VED is paid to the DVLA, and you can pay in one annual lump sum or by monthly or six-monthly direct debit (though instalments cost more overall). The tax is non-transferable — when you sell a car, the remaining VED is refunded to you and the new owner must tax it themselves. Since 1 October 2014, the paper tax disc has been abolished, and VED is linked to the vehicle's registration number and checked electronically by the police and ANPR cameras. Failure to pay VED can result in fines, clamping, and penalty notices.

Current VED Rates 2026 (First Year and Standard)

For cars registered on or after 1 April 2017, VED has two rate structures. First-year (premium) rate is based on CO2 emissions (g/km) and is included in the car's on-the-road price when new. In 2026, the first-year rate ranges from £0 for 0g/km (electric) to £2,745 for cars over 255g/km. After the first year, you pay the standard rate — a flat annual fee depending on fuel type: £190 for petrol and diesel cars (band B–C), £180 for alternative fuel cars (hybrids, bioethanol), and £0 for zero-emission electric cars. Cars with a list price over £40,000 (including options but excluding VAT and first registration fee) pay an additional Expensive Car Supplement of £390 per year for years two to six of the vehicle's life. This supplement applies to petrol, diesel, hybrid, and alternative fuel cars — but not to zero-emission electric vehicles. For cars registered between 1 March 2001 and 31 March 2017, rates are based on 13 CO2 bands (A–M), ranging from £0 (Band A, under 100g/km) to £735 (Band M, over 255g/km). Check your vehicle's exact band on the DVLA vehicle enquiry service before budgeting.

Electric and Low-Emission Car Tax Rules

Electric vehicles (EVs) have significant VED advantages in 2026. Zero-emission cars registered from 1 April 2020 onwards pay £0 first-year rate and £0 standard rate — making them completely exempt from VED for their lifetime under current rules. However, the Expensive Car Supplement exemption for EVs ended from April 2025, so electric cars registered on or after 1 April 2025 that cost over £40,000 will pay the £390 supplement for years two to six. Hybrid and plug-in hybrid cars (PHEVs) pay reduced first-year rates based on their CO2 emissions, but standard rates are the same as petrol/diesel from year two (£190). Low-emission cars under 100g/km registered before April 2017 fall into the cheapest VED bands (A–C), often £0–£30 per year. From 2025, all new zero-emission cars registered from 1 April 2025 will no longer be exempt from the £40,000 expensive car supplement, so some EV buyers may face higher bills than expected. The government's zero-emission vehicle mandate requires 80% of new car sales to be zero-emission by 2030, and VED rates are expected to continue evolving. If you are considering an EV, factor VED costs into your total cost of ownership calculations alongside charging, insurance, and maintenance.

How to Tax Your Car

You can tax your car online via the GOV.UK vehicle tax service, by phone using the DVLA's automated service (0300 123 4321), or at selected Post Office branches (though this requires your V5C logbook and insurance certificate). To tax online, you need your vehicle's registration number and V5C reference number (the 11-digit number from your logbook). If you do not have a V5C, you can use the V62 form to apply for a replacement. You must have a valid MOT test certificate (for cars over 3 years old) and valid car insurance before taxing. You can set up direct debit payments — monthly (12 instalments) or six-monthly — though paying annually is cheapest as instalments carry a surcharge (roughly 5–10% extra for monthly). The DVLA sends you a reminder letter (V11) about 2–4 weeks before your tax expires. You can also check your tax status online at any time using the free vehicle enquiry service. If you buy a used car, the dealer or previous owner will provide a new keeper slip (V5C/2), and you need to tax the car immediately — there is no grace period for new owners. Taxing is quick online, and your payment is confirmed instantly. You can also forward tax up to 2 months before expiry.

VED Exemptions for Disabled and Historic Vehicles

Certain vehicles qualify for full VED exemption. Historic vehicles (built before 1 January 1985) are exempt from VED. You must register the vehicle as historic on the V5C — the DVLA will send a new logbook showing the tax class as "Historic Vehicle." Once registered, you do not need to tax it, but you still need an MOT (unless the vehicle is over 40 years old and exempt from MOT). Disabled persons can claim VED exemption through the Disability Living Allowance (DLA), Personal Independence Payment (PIP) at the enhanced mobility rate, War Pensioners' Mobility Supplement, or Armed Forces Independence Payment. The vehicle must be registered in the disabled person's name, or in the name of a nominated driver if the disabled person cannot drive. Disabled passenger vehicles (e.g., minibuses used to carry disabled people) may also be exempt. Electric vehicles remain VED-exempt for the standard rate (but the expensive car supplement may apply from April 2025 as noted). Zero-emission goods vehicles (electric vans) are also exempt. Mobility scooters and powered wheelchairs are exempt regardless of user age or disability status. To claim an exemption, tick the relevant box when taxing online or at a Post Office, and have your DLA/PIP award letter ready if required.

What Happens If You Do Not Tax Your Car

Driving or keeping an untaxed vehicle on a public road is illegal and can result in serious penalties. The DVLA uses Automatic Number Plate Recognition (ANPR) cameras to identify untaxed vehicles. If you are caught, the DVLA will issue a £80 penalty notice (reduced to £40 if paid within 21 days). If the penalty is not paid, the DVLA can take further action, including clamping your vehicle (release fee £100–£200 plus storage charges), issuing a court summons (fines up to £1,000), or destroying the vehicle. If the vehicle is Statutory Off Road Notification (SORN), you do not need to tax it, but it must be kept off public roads. Breaking a SORN by driving or parking on a public road is a separate offence with penalties up to £2,500. If you buy a used car from a dealer, the dealer usually taxes it for you, but check. Private sellers do not — you must tax it before driving away. There is no grace period for VED — if your tax expires, you cannot drive until you renew it. You can check your tax status instantly on gov.uk using your registration number. If your vehicle is stolen or written off, you can apply for a VED refund for the remaining full calendar months. VED refunds are automatic when you notify the DVLA of a sale, scrappage, or SORN, but check your bank account to ensure the refund arrives.

FAQs

Can I pay car tax monthly?

Yes. You can pay by monthly direct debit (12 instalments) or six-monthly. Paying annually is the cheapest option. The monthly direct debit costs roughly 5–10% more than the annual rate. You can switch between payment methods at any time.

Do electric cars pay car tax?

Zero-emission electric cars registered after March 2020 pay £0 first-year rate and £0 standard rate in 2026. However, electric cars costing over £40,000 registered from April 2025 will pay the £390 expensive car supplement for years two to six.

What is the Expensive Car Supplement?

The Expensive Car Supplement is an additional £390 per year VED charge for cars with a list price over £40,000. It applies from year two to year six of the vehicle's life. It does not apply to zero-emission electric cars (but will from April 2025).

Do I need an MOT to tax my car?

Yes. You cannot tax a car that is over 3 years old without a valid MOT certificate. The DVLA checks the MOT database automatically when you try to tax the vehicle. You must also have valid insurance.

What happens to my car tax when I sell my car?

When you sell your car, the DVLA automatically refunds the remaining full calendar months of VED to you. The new owner must tax the vehicle immediately. You should notify the DVLA of the sale online using the V5C logbook.