Road Tax Costs in the UK

Road Tax, officially known as Vehicle Excise Duty (VED), is an annual tax that must be paid for most vehicles used on UK roads. The amount you pay depends on various factors including your vehicle's CO2 emissions, fuel type, and when it was first registered.

💡 Understanding how Road Tax works, what you'll pay, and how to reduce costs can help you budget for vehicle ownership and potentially save money when choosing your next car.

How Much is Road Tax in the UK?

Electric Vehicles: £0 - fully electric vehicles are exempt from Road Tax.

Low Emission Vehicles (1-50g/km CO2): £0 to £10 for the first year, then £0 annually for plug-in hybrids.

Standard Petrol/Diesel Cars: £180 per year for vehicles registered after April 2017 with standard emissions.

High Emission Vehicles (over 255g/km CO2): £2,605 per year for the first year, then £630 annually for vehicles registered after April 2017.

For example, a typical petrol car with CO2 emissions of 120-150g/km registered after April 2017 pays £180 per year in Road Tax. A high-performance car with emissions over 255g/km pays £2,605 in the first year, then £630 annually. Electric vehicles like Teslas pay £0 in Road Tax.

Factors that Affect the Cost of Road Tax in the UK

🌱 Vehicle Emissions

The primary factor affecting Road Tax is your vehicle's CO2 emissions. Lower emissions mean lower tax, with electric vehicles paying £0. Vehicles with emissions between 1-50g/km typically pay £0 to £10 in the first year, then £0 annually. Higher emissions result in significantly higher tax rates.

⛽ Fuel Type

Electric vehicles are exempt from Road Tax, while petrol and diesel vehicles are taxed based on emissions. Hybrid vehicles often benefit from lower tax rates due to reduced emissions. Alternative fuel vehicles (LPG, CNG) may qualify for reduced rates, though this depends on their emissions.

📅 Registration Date

Vehicles registered before April 2017 use a different tax system based on engine size and fuel type, typically costing £0 to £325 per year. Vehicles registered after April 2017 use an emissions-based system with first-year rates and standard rates. The registration date determines which tax band applies.

💰 Vehicle Value

For vehicles with a list price over £40,000 registered after April 2017, an additional supplement of £390 per year applies for years 2-6, on top of the standard rate. This affects luxury and premium vehicles, making Road Tax significantly more expensive for high-value cars.

🚗 Vehicle Type

Different vehicle types have different tax rates. Motorcycles, for example, typically pay £22 to £48 per year depending on engine size. Commercial vehicles have different rates, and some vehicles like agricultural vehicles may be exempt. Always check the specific rates for your vehicle type.

How to Save Money on Road Tax in the UK

💡 Choose Low or Zero Emission Vehicles

Electric vehicles are completely exempt from Road Tax, saving you £180 to £630 per year compared to petrol or diesel vehicles. Plug-in hybrids with emissions under 50g/km also pay £0 annually after the first year. Choosing a low-emission vehicle can significantly reduce your annual Road Tax costs.

🏥 Consider Vehicle Value

If you're buying a new vehicle, consider whether it's worth paying over £40,000, as this triggers an additional £390 per year supplement for years 2-6. Choosing a vehicle just under this threshold can save you £1,950 over five years. Used vehicles are valued at their original list price, not current market value.

💷 Check Emissions Before Buying

Before purchasing a vehicle, check its CO2 emissions rating, as this directly affects your Road Tax. Vehicles with emissions between 1-50g/km pay minimal or no tax, while high-emission vehicles can cost over £2,600 in the first year. The vehicle's V5C document or manufacturer's specifications will show the emissions rating.

🔍 Consider Older Vehicles

Vehicles registered before April 2017 use the older tax system, which may be cheaper for some vehicles, particularly those with larger engines that would be heavily taxed under the new system. However, this depends on the specific vehicle and its emissions. Always check the exact tax rate before purchasing.

✨ Pay Annually

While you can pay Road Tax monthly or every six months, paying annually is the most cost-effective option. Monthly payments include a 5% surcharge, while six-monthly payments include a 10% surcharge. Paying annually avoids these additional charges, saving you money over the year.

FAQs

Conclusion

🎯 Road Tax costs vary from £0 for electric vehicles to over £2,600 for high-emission vehicles in the first year. Choosing a low or zero-emission vehicle can save you hundreds of pounds annually, while paying annually rather than monthly avoids surcharges. Consider vehicle emissions and value when purchasing, as these factors significantly impact your Road Tax costs. With careful planning, you can minimise your annual Road Tax expenses while still driving a vehicle that meets your needs.

	Jane Smith
	Am British, live in London (1985–present)