Car Tax (VED) Explained

The new financial year brings yet more changes to the Vehicle Excise Duty (aka car tax). Here’s our explainer to help you stay in the know.

It seems that not a year has gone by recently where the rules surrounding Vehicle Excise Duty (VED) – also referred to as car tax or road tax – hasn’t changed. Rather than having to trawl your way through the new information, we’ve put together a quick explainer laying out what’s changed, who the changes will affect, and the different systems and bandings that may apply to your car.

What’s changed to the car tax system in 2019?

The last major change to car tax came back in 2017, which saw the tiered system scrapped, except for the first year. Instead, it was replaced by a flat rate of £140 from year two onward. An additional charge of £310 per year for five years for cars valued over £40,000 was also added. However, this new system only applied for vehicles registered from April 2017 onward. Everything older than this remained on the old system.

2018 saw a further change to target diesel cars. It split out those that do not meet the new ‘Real Driving Emissions 2 standard’ (which doesn’t come into effect until 2020) into their own, more expensive category.

So what’s changed for 2019? The main change is a price increase in line with inflation. For those with cars registered from 1st April 2017, this means an increase of £5 for the standard rate (second year onward). For cars registered between 1st March 2001 and 31st March 2017, the increase varies from £0 to £15, depending on your car’s CO2 emissions. The additional charge for cars with a list price of £40,000 has also increased, from £310 per year to £440 or £450 for all cars excluding electric vehicles.

How much will you actually pay?

So what does this actually mean for car owners, and how much will you need to pay? The tables below outline costs for the two different systems – pre-April 2017 and post-2017. To work out how much you’ll pay, all you need is the date the car was first registered and your car’s CO2 emissions in g/km. This information can be found on your car’s V5C.

Car tax for vehicles first registered between 1st March 2001 and 31st March 2017

VED Band CO2 emissions (g/km) 2019-2020 Standard Rate*
A Up to 100 £0
B 101-110 £20
C 111-120 £30
D 121-130 £125
E 131-140 £145
F 141-150 £160
G 151-165 £200
H 166-175 £235
I 176-185 £260
J 186-200 £300
K** 201-225 £325
L 226-255 £555
M Over 255 £570

*Alternative fuel discount of £10

**Includes cars emitting over 225 g/km registered before March 23rd 2006

Car tax for vehicles first registered from 1st April 2017 (second year onward)

Fuel Type Standard Rate from 2nd year onward 2019-2020
Petrol or Diesel £145
Electric £0
Alternative fuel (hybrid) £135

What if I’m buying a new car?

As we’ve mentioned before, the first year under the new system works differently than all subsequent years. Instead of a flat rate, it uses a tiered rate which increases based on CO2 emissions. However, this charge is built into the “on the road” price advertised by car manufacturers. “On the road” reflects not just the list price of the car, but other costs associated with buying and driving a brand new vehicle. This includes VAT, registration and delivery fees, and the first year’s car tax.  If you’re interested in how much your car’s first year’s car tax was, you can find it on the invoice for your new car, along with a breakdown of everything covered in your car’s “on the road” price.

Other things to consider when taxing your car

Aside from the cost of the car tax itself, there’s another important piece of car maintenance to bear in mind – the MOT.  If your car is 3 years old or older, you’ll need to have a valid MOT certificate before you can tax your car. Your MOT expiry date is usually in line with the car’s registration date, however, you can easily check when yours is using the Government’s online checker. And don’t forget, you can get your MOT done up to a month before the due date and preserve the anniversary. So if your MOT was due on 30tht June 2019, you could have your MOT carried out anytime from 30th May 2019 while still keeping the new expiry date as 30th June 2020.

If you’d like to book your car in for its MOT, you can enquire online. Or feel free to contact one of our aftersales departments in Byfleet, Bookham and Orpington.