Guide · Updated May 2026
UK Road Tax (VED) Explained: 2025/26
Vehicle Excise Duty — known to most drivers as road tax or car tax — is the annual charge paid to the DVLA to keep a vehicle legally on UK roads. The 2025/26 system has 15 CO2 bands for the first year, a flat £195 standard rate thereafter, a £425 Expensive Car Supplement for vehicles over £40,000, and — for the first time — full VED liability for electric cars. This guide covers every rate, every exemption and every administrative quirk you need to know.
What is Vehicle Excise Duty?
Vehicle Excise Duty is the UK's annual tax on motor vehicles, administered by the Driver and Vehicle Licensing Agency (DVLA) under the Vehicle Excise and Registration Act 1994. It raises around £8 billion per year and goes into the general Consolidated Fund — despite the popular name "road tax", it has not been hypothecated to road maintenance since 1937. Roads are funded from general taxation, not VED.
The current VED structure dates to 1 April 2017 and is based on a split between a high first-year rate that is sensitive to CO2 emissions (intended as an incentive at the point of purchase) and a flat standard rate from year two onwards. Before April 2017, VED was a single graduated annual rate tied to CO2 across the whole life of the vehicle — many older cars still sit on those legacy bands.
VED is charged annually but can be paid in 6-monthly or 12-monthly Direct Debit instalments. The vehicle keeper is responsible for keeping the tax current — there is no longer a physical tax disc; enforcement is electronic via ANPR cameras checking the DVLA database in real time.
First-Year Rates by CO2
The first year of a new car's life is taxed at one of 15 CO2-based rates. The highest-emitting cars pay over £5,000 in the first year — a deliberate showroom-tax signal designed to discourage gas-guzzlers. The rates were sharply increased from April 2025 to widen the gap between low- and high-emission cars.
| CO2 emissions (g/km) | Petrol / Diesel first year | Alternative fuel |
|---|---|---|
| 0 | £10 | £0 |
| 1 – 50 | £110 | £100 |
| 51 – 75 | £135 | £125 |
| 76 – 90 | £270 | £260 |
| 91 – 100 | £350 | £340 |
| 101 – 110 | £390 | £380 |
| 111 – 130 | £440 | £430 |
| 131 – 150 | £540 | £530 |
| 151 – 170 | £1,360 | £1,350 |
| 171 – 190 | £2,190 | £2,180 |
| 191 – 225 | £3,300 | £3,290 |
| 226 – 255 | £4,680 | £4,670 |
| Over 255 | £5,490 | £5,480 |
The first-year rate is normally rolled into the on-the-road price quoted by dealers, so private buyers rarely pay it directly. Fleet and lease arrangements pass it through in monthly instalments, where it can materially shift the effective monthly cost of a high-emission vehicle compared with a hybrid alternative.
Standard Rate from Year 2
From the second year of ownership onwards, the CO2-graded structure disappears and almost every petrol or diesel car pays the same flat standard rate of £195for 2025/26 — up from £190 the previous year. Alternative fuel vehicles (hybrid, bioethanol, LPG) pay £185. Electric vehicles registered after 1 April 2017 also pay the £195 rate from April 2025 onwards.
The standard rate rises annually by RPI. While £195 sounds modest, it is the dominant cost over a 10-year vehicle life: a typical family car will pay perhaps £400 in the first year and then £195 × 9 = £1,755 over the remaining life, totalling about £2,155 of VED across the whole period of ownership.
The £425 Expensive Car Supplement
The Expensive Car Supplement — known formally as the Additional Rate — is an extra £425 per year charged on any car with a manufacturer's list price over £40,000 at first registration. It runs for five years (years 2 to 6 of registration), so total annual VED during the supplement period is £195 + £425 = £620. From year 7 onwards the supplement falls away and the vehicle reverts to the standard £195.
The £40,000 threshold has been frozen since the supplement was introduced in 2017, meaning fiscal drag has pulled an ever-wider range of mainstream cars into scope. Where in 2017 the supplement targeted only luxury vehicles, by 2025/26 many mid-range family SUVs and EVs comfortably exceed £40,000 and trigger the charge. Cars over the threshold pay an additional £2,125 in supplement charges over their first six years of registration.
The list price is the manufacturer's recommended price including VAT and any optional extras and delivery charge — not the discounted price you actually paid. Negotiating the dealer down to £39,000 on a £41,000 list-price car still triggers the supplement, because the £40,000 trigger uses the list price not the transaction price. Always check the V5C registration document if you are unsure.
The April 2025 EV Change
From 1 April 2025, electric vehicles lost their long-standing VED exemption — the single biggest change to the VED system in the 2020s. The reform brings EVs into the same framework as petrol and diesel cars, on the basis that as EV uptake grows the Treasury needs to replace lost revenue from declining fuel duty receipts.
| EV registration date | 2024/25 rate | 2025/26 rate |
|---|---|---|
| New (from 1 April 2025) | n/a | £10 year 1, £195 year 2+ |
| Registered April 2017 – March 2025 | £0 | £195 |
| Registered March 2001 – March 2017 | £0 | £20 |
The £40,000 Expensive Car Supplement also now applies to EVs. Given that the average new EV transaction price in the UK is well above £40,000, the vast majority of newly registered EVs will trigger the supplement and pay £620 per year in years 2-6 of registration.
Electric motorcycles and mopeds remained exempt under the reform — the change applied only to four-wheeled cars, vans and motor homes. Plug-in hybrid vehicles continue to be taxed under the alternative-fuel banding (which is £10 cheaper than petrol/diesel equivalents). The OZEV plug-in car grant was withdrawn in 2022, so EVs no longer benefit from a purchase subsidy either.
Motorcycle VED
Motorcycles, mopeds and tricycles use a different VED structure based on engine capacity (cc), not CO2 emissions, with no first-year graduation. The 2025/26 rates are:
- Not over 150cc: £25
- 151cc – 400cc: £55
- 401cc – 600cc: £84
- Over 600cc: £117
Tricycles over 450kg unladen weight use the standard motorcycle bands. Smaller tricycles up to 150cc / 450kg are taxed at the lightest moped rate. Electric motorcycles are exempt across the board — they were excluded from the April 2025 EV reform that affected cars.
Classic Vehicle Exemption
Vehicles built more than 40 years before the start of the current tax year (6 April) qualify for the historic vehicle VED class and pay £0. The exemption is rolling, so the eligible date moves forward by one calendar year every 12 months. For the 2025/26 tax year, vehicles built before 1 January 1985 are eligible.
Applying for the historic class is a one-time DVLA process using form V112 and the vehicle's V5C registration certificate. Once accepted, the vehicle continues to be taxed each year at £0 but you still need to formally renew (otherwise enforcement treats it as untaxed). Historic-class vehicles are also exempt from MOT requirements, though the DVSA recommends voluntary annual testing to confirm roadworthiness.
The 40-year rolling exemption was introduced in stages from 2014 onwards, replacing the old fixed cut-off of 1973. Cars from the mid-1980s that were previously not classic are now entering the exemption each year — a quirk that makes 1980s and early 90s vehicles increasingly attractive as a tax-light hobby option for enthusiasts.
Paying VED: Online, Post Office, Direct Debit
The three official ways to pay VED are all administered by the DVLA. There are no third-party agents that can charge a markup — anyone offering to "tax your car for you" is either offering an administrative service or running a scam.
- Online: gov.uk/vehicle-tax — the cheapest and fastest option. Card payment or Direct Debit. Available 24/7. Requires the V5C, V11 reminder, or V62 reference number.
- Phone: 0300 123 4321, 24 hours a day. Card payment only — no Direct Debit by phone.
- Post Office: in person at any branch displaying the vehicle tax sign. Requires the V11 reminder or V5C plus a current MOT certificate. Slower but useful if you do not have internet access.
Direct Debit is the only payment frequency option. You can choose: a single annual payment (no surcharge), two six-monthly payments (5% surcharge total), or twelve monthly payments (also 5% surcharge total). On £195 annual VED, the monthly route costs £17.06 per month — about £10 more per year than the single payment but with the advantage of cashflow smoothing and auto-renewal.
SORN — Off-Road Vehicles
A Statutory Off Road Notification (SORN) tells the DVLA that your vehicle is being kept off public roads — typically because it is in storage, undergoing restoration, or unused for the winter. While a SORN is active, no VED is payable and no insurance is legally required (though most owners keep at least third-party cover for fire and theft).
You can SORN online at gov.uk/make-a-sorn, by phone (0300 123 4321), or by post on form V890. SORN takes effect immediately when declared from the start of the next calendar month, or from a specified future date. Any complete unused months of already-paid VED are refunded automatically to the original payment method.
A SORN vehicle must be kept on private land — a driveway, garage or off-road yard. Driving it on a public road is illegal even briefly, with the sole exception of driving to or from a pre-booked MOT test. Penalties for breaching SORN are severe: minimum £80 fixed penalty rising to court fines of up to £2,500 plus vehicle seizure.
Transferring VED When You Sell
Since 1 October 2014, VED no longer transfers with the vehicle on sale. The old system, where the buyer inherited any unused tax, was abolished because of widespread abuse and difficulty tracking. The current rule: when you sell, you notify the DVLA (online or by posting the green slip of the V5C) and the unused full months of VED are refunded automatically to you.
The buyer must then tax the vehicle in their own name beforedriving it away. Driving a newly purchased car home on the seller's old tax is illegal — the transfer process eliminates this option. Almost every dealer now taxes the car as part of the handover, but private sales require the buyer to set up VED through gov.uk immediately on collection.
Enforcement and Penalties
The DVLA uses a nationwide network of ANPR cameras — both fixed and mobile, including police vehicles — to check vehicle registrations against the live tax database. An untaxed vehicle on a public road can trigger an automated penalty within hours.
The standard penalty is an £80 Late Licensing Penalty, halved to £40 if paid within 28 days. Continued non-payment escalates to a court summons with potential fines of up to £1,000 plus vehicle clamping, removal and impoundment. Release fees from a DVLA pound start at around £200 plus the outstanding tax — making untaxed driving one of the most expensive small infractions you can commit on UK roads. Driving an untaxed vehicle also typically invalidates your insurance policy.