What is a car tax band?

Knowing what tax band your car belongs to can help you work out its long-term running costs. But with lots of different bands, calculating costs can be confusing. Here, a comparison site for cheap car insurance quotes, mustard.co.uk, takes you through what you need to know. 

Why do car tax bands exist?

If you’re using your car on public roads, you’ll need to pay car tax every year. The tax is also known as road tax but is officially called vehicle excise duty or VED for short. Car tax bands set out what you’ll need to pay.

Confusingly, the rules over car tax bands have changed several times which can make it harder to keep up with what you need to pay. 

What tax band is my car in?

When your car tax is due to run out, you’ll usually get a reminder in the post. You can then go online and renew your tax there and then. 

But if you’re looking at buying a car and want to work out costs, tax bands are based on when your car was registered or its carbon (CO2) emissions:

Cars registered on or after 1 April 2017

You’ll pay two different rates, a ‘first-year’ rate and then a ‘standard-rate’.

First-year rates are paid when the car is first registered, this amount is based on the car’s CO2 emissions. If the car is classed as an alternative fuel vehicle (such as hybrids, bioethanol and LPG cars) you’ll pay £10 less than the amounts shown:

CO2 emissions	First-year rate
0g/km	£0
1-50g/km	£10
51-75g/km	£25
76-90g/km	£120
91-100g/km	£150
101-110g/km	£170
111-130g/km	£190
131-150g/km	£230
151-170g/km	£585
171-190g/km	£945
191-225g/km	£1,420
226-255g/km	£2,015
Over 255g/km	£2,365

The standard rate is payable from the car’s second year onwards and is a flat rate of £165 (or £155 for alternative fuel cars). 

If your car also had a list price of more than £40,000, you’ll need to pay an extra ‘expensive car supplement’. Currently, this is £355 per year and must be paid from the car’s second year of registration for five years. Zero emission cars are exempt from this. 

Cars registered between 1 March 2001 and 31 March 2017

Car tax is also based on CO2 emissions but the bands are graded slightly differently. Again, alternative fuel cars pay £10 less. 

Band and CO2 emissions	Car tax cost for 12-months
A: up to 100g/km	£0
B: 101-110g/km	£20
C: 111-120g/km	£30
D: 121-130g/km	£135
E: 131-140g/km	£165
F: 141-150g/km	£180
G: 151-165g/km	£220
H: 166-175g/km	£265
I: 176-185g/km	£290
J: 186-200g/km	£330
K: 201-225g/km	£360
L: 226-255g/km	£615
M: Over 255g/km	£630

Cars registered before 1 March 2001

Tax bands are much simpler for these cars as cost is based simply on engine size. For cars with an engine size (CC) under 1549, annual VED costs £180. For cars with engines over 1549, VED is £295. 

Car tax for electric cars 

At the moment, electric cars are exempt from car tax and from the expensive car supplement. Nevertheless, this is due to change in April 2025 when electric vehicles (EVs) will start paying VED. 

What happens if I don’t pay car tax?

If you forget to pay for your car tax, you can be fined £80. If you don’t pay the tax, the consequences can be serious and your car could be clamped or even destroyed. 

How do I pay for car tax?

The quickest way to pay car tax is online at GOV.UK. You should have the reminder form that was sent to you handy, or your car’s logbook (V5C). If you’ve just bought the car, you’ll need the green part of the V5C (the ‘new keeper’ supplement).

You can pay by credit or debit card or by Direct Debit but it’s worth bearing in mind that you’ll pay slightly more if you pay in monthly instalments. 

Don’t forget that after your car’s third birthday, it will need a valid MOT, you’ll also need to make sure your car is insured before you can pay for car tax. 

If your car insurance also needs renewing, why not head to mustard.co.uk, where you can compare quotes from leading UK insurers in just a few minutes.