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The complete guide to vehicle tax

By September 21, 2020October 23rd, 2023No Comments

The complete guide to vehicle tax

It’s hard to believe that it has been 4 years since the government scrapped the paper car tax disc and moved the whole process online. However, those are not the only changes that have been made as there have also been some big changes to the rates of vehicle tax and what they apply to. In this article, we’ll take you through how vehicle excise duty is calculated, how to check that your vehicle is taxed and what the most recent tax rates mean for new vehicles. So let’s get started.

How is vehicle excise duty (VED) calculated?

Depending on the age of your vehicle there are a couple of ways that VED can be calculated with all vehicles registered after 1st of March 2001 being taxed on their CO2 emissions. Vehicles registered before the 1st of March 2001 are taxed based on engine size as CO2 emission data was not generally available.

The rates of VED are variable and the current bands range from A which are rated as zero-emission vehicles up to M which are for vehicles with emissions greater than 256 grams per kilometre. As well as the standard variable rate, since 2010 there has also been a showroom tax to cover the first year of Vehicle Excise Duty.

Cars registered after 1st of April 2017

For new vehicles registered after the 1st of April 2017, there will now be a flat standard rate of £140 for all cars except those with CO2 emissions of zero which remain at £0. The first year rate will vary based on emissions and now reaches a massive £2070 for vehicles with emissions of 256 or more. On top of this, there is also an extra £310 annual charge for the first 5 ‘standard rate years’ for all cars with a list price above £40,000 including zero-emissions vehicles.

Vehicle excise duty between 1st of March 2001 and 31st of March 2017

Any vehicles registered between 2001 and 2017 fall into the older VED model with vehicles with CO2 emissions below 100 grams per kilometre being exempt from VED. During this period the standard rates were variable based on the CO2 emissions of the vehicle and for categories D and up these standard rates were incrementally increased each year.

The full list of vehicle tax rates for cars can be found here

Checking if your vehicle is taxed

While paper tax discs provided a simple way to check that your car was taxed it is still relatively simple to check that your car is taxed. In order to check the status of your vehicle tax, you’ll just need to head to the government website and enter your car registration number as well as the make of vehicle. This service also lets you check when your MOT is due.

Can car tax be transferred?

One of the biggest changes in car tax is that when a vehicle is sold the new owner is responsible for taxing the vehicle online through the DVLA website or at a post office. Vehicle tax is no longer transferred from the old owner to the new owner so you need to make sure you are taxing your vehicle straight away. For those selling a vehicle, you will receive a full refund for any full months that are remaining on your car tax. This is good news for anyone who is scrapping their vehicle as it means any unused months will be refunded to them.