Alternative fuel car tax UK — vehicles running on compressed natural gas (CNG), liquefied petroleum gas (LPG), or bioethanol qualify for reduced first-year VED rates. Here is the guide for 2026.
Alternative Fuel Vehicles: What Qualifies
Alternative fuel vehicles (AFVs) are those that run on fuel other than petrol or diesel — including CNG, LPG, bioethanol (E85), and bifuel vehicles that can run on both petrol and a gas fuel. The key tax benefit is a one-band reduction in first-year VED compared to the equivalent petrol vehicle.
Alternative Fuel First-Year VED Reduction
An AFV receives a one-band reduction in first-year Vehicle Excise Duty. For example, a CNG vehicle that would normally be in the 131-150g/km band (£600) is reduced by one band. The exact reduction depends on the vehicle's CO2 figure and the applicable band table. AFVs at 0g/km would have no reduction needed — they already qualify for £0.
CNG and LPG Vehicle Road Tax
CNG (compressed natural gas) and LPG (liquefied petroleum gas) vehicles that qualify as AFVs get the first-year VED reduction. Standard annual rates from year 2 onwards are the same as petrol — £190/year. The first-year saving is the primary benefit. Related: Alternative Fuel Car Tax UK 2026 | UK Advisory Fuel Rates 2026 | UK Car Fuel Consumption Guide 2026 | UK Car Fuel Filter Guide 2026.
Biofuel and E85 Vehicles
Vehicles running on E85 bioethanol (85% ethanol, 15% petrol) qualify as AFVs and receive the one-band first-year VED reduction. These are most commonly flex-fuel vehicles capable of running on both standard petrol and E85. The reduction applies only in the first year — years 2 onwards use standard rates.
Conclusion
Alternative fuel car tax UK: one-band reduction in first-year VED for CNG, LPG, bioethanol. Standard annual rate applies from year 2. GOV.UK VED tables show exact rates.
Vehicle Excise Duty (VED) rates in the UK are reviewed annually, typically in April with the new financial year. The DVLA administers all vehicle taxation and registration, and you can check your vehicle's current tax status for free at gov.uk/check-vehicle-tax using only your registration number. Rates are determined by the vehicle's CO2 emissions and list price at the time of first registration, with additional premiums applying for high-value vehicles.
Frequently Asked Questions
Q: How much is car tax (VED) in the UK 2026?
Car tax rates in the UK depend on your vehicle's CO2 emissions and list price. Standard rates start from £190 per year for petrol and diesel cars, with zero-rated VED for EVs. First-year rates vary from £0 to £2,605 depending on emissions. Additional premiums apply for vehicles over £40,000.
Q: How do I check if my car is taxed online?
You can check your vehicle's tax status for free on the Gov.uk website at gov.uk/check-vehicle-tax. You'll need your vehicle's registration number (number plate). You can also check via the Motor Insurance Database to verify road tax and insurance status simultaneously.
Q: Can I get a refund on car tax if I sell my vehicle?
Yes — if you sell or scrap your vehicle, you can claim a refund on any full months of remaining road tax. Contact DVLA with the V11 reminder letter or apply online at gov.uk. Refunds are usually processed within 4-6 weeks.
Q: Is road tax refund available when transferring ownership?
No — road tax does not transfer with the vehicle. When you sell your car, the tax is automatically cancelled and any remaining months are refunded to you by DVLA. The new owner must tax the vehicle immediately. As a buyer, always verify the vehicle's tax status before purchasing.
Q: What is the luxury car tax threshold in the UK 2026?
The additional rate for vehicles over £40,000 (list price) adds £410 per year to standard VED rates for years 2-6 of registration. This surcharge brings the annual cost for high-emission vehicles over £40,000 to around £600-690 per year. Pure EVs under £40,000 pay zero VED.