What Is Road Tax (VED)?
Vehicle Excise Duty (VED) — commonly called road tax — is an annual tax levied by HMRC on vehicles registered in the UK. It is not a charge for using specific roads; it is simply a tax on owning a vehicle that is used or parked on public roads.
Despite its informal name, road tax revenue does not go directly to road building or maintenance — it goes into the general Exchequer. VED is enforced by the DVLA and non-payment can result in a fine of up to £1,000.
Since the introduction of an electronic register, physical road tax discs are no longer required. Enforcement is via number plate recognition cameras that check the DVLA database in real time.
Standard Rates 2026/27
For cars registered on or after 1 April 2017 (the second year of ownership onward), the standard rate applies:
| Fuel type | Standard annual rate | 6-month rate | Monthly DD |
|---|---|---|---|
| Petrol/diesel | £195 | £107.25 | ~£17.06 |
| Alternative fuels (e.g. hybrid) | £195 | £107.25 | ~£17.06 |
| Pure electric (from Apr 2025) | £195 | £107.25 | ~£17.06 |
The monthly direct debit option adds 5% to the annual cost. Six months costs 55% of the annual rate.
First-Year Rates for New Cars
New cars pay a higher first-year rate based on their CO2 emissions. For new registrations from April 2025:
| CO2 (g/km) | First-year rate (petrol/diesel) |
|---|---|
| 0 (zero emission) | £10 |
| 1–50 | £110 |
| 51–75 | £130 |
| 76–90 | £175 |
| 91–100 | £195 |
| 101–110 | £220 |
| 111–130 | £270 |
| 131–150 | £680 |
| 151–170 | £1,095 |
| 171–190 | £1,650 |
| 191–225 | £2,340 |
| 226–255 | £2,745 |
| Over 255 | £2,745 |
Expensive Car Supplement
Cars with a list price exceeding £40,000 (including factory options, delivery, and VAT) pay an additional £425/year for years 2 through 6 of ownership. This is on top of the standard rate:
- Year 1: first-year rate applies (based on CO2)
- Years 2–6: standard rate (£195) + supplement (£425) = £620/year
- Year 7+: standard rate only (£195/year)
The supplement applies to all fuel types, including electric cars — a significant change from the previous zero-VED advantage for EVs.
Electric Cars and VED
The road tax treatment of EVs has changed significantly:
- Registered on/after 1 April 2025: Pay the standard rate (£195/year) from year 2. Pay £10 first-year rate in year 1. Pay expensive car supplement if over £40,000.
- Registered 1 April 2017 – 31 March 2025: Pay the standard rate from 2025/26 onwards.
- Registered before 1 April 2017: Remain exempt from VED.
The end of the EV exemption was part of the government's fiscal response to declining fuel duty receipts as EV adoption grows.
Older Cars (Pre-April 2017)
Cars registered between 1 March 2001 and 31 March 2017 use a different, CO2-banded system with rates ranging from £0 (for very low-emission cars) to £570/year for the highest emitters. Cars registered before March 2001 use engine size bands.
How to Pay Road Tax
VED can be renewed online via the DVLA website using your V11 reminder or V5C logbook. Payment options:
- Annual: one payment, cheapest overall
- 6 months: 55% of the annual rate
- Monthly direct debit: 5% surcharge on annual rate
Road tax cannot be transferred when a car is sold. The new owner must tax the vehicle immediately. The old owner is automatically refunded for any complete calendar months remaining on their tax.
Exemptions
Vehicles exempt from VED include: vehicles used by disabled people (Disabled Tax Class), some historic vehicles (registered before 1 January 1979), agricultural vehicles, and vehicles used only on public roads by emergency services.