Car tax guide UK — Vehicle Excise Duty (VED), commonly called road tax, is one of the most important costs of owning a vehicle in the United Kingdom. Here is the complete guide to understanding and managing your car tax in 2026.
What Is Vehicle Excise Duty (VED)?
Vehicle Excise Duty is an annual tax applied to all vehicles registered in the UK. The revenue funds road maintenance and infrastructure. VED rates are graduated based on the vehicle's CO2 emissions — lower-emitting vehicles pay less, with pure electric vehicles at £0 first-year rate.
How CO2 Emissions Determine Your Road Tax
VED is calculated based on your vehicle's official CO2 emissions figure in grams per kilometre (g/km). This figure is shown in Section D of your V5C logbook. Vehicles registered from April 2025 use a 20-band graduated first-year VED system, with rates from £0 (0g/km) to £2,605 (over 255g/km).
First-Year vs Standard Annual Rates
First-year VED rates are higher and apply only to the first year of a vehicle's registration. From year 2 onwards, all petrol and diesel vehicles pay the standard annual rate of £190/year. Electric vehicles pay £10/year standard rate (or £365 if over £40,000).
Exemptions and Free Road Tax
Several categories qualify for free road tax: pure electric vehicles (0g/km), vehicles over 40 years old (historic exemption), recipients of disability mobility allowances, and official MOD vehicles. These exemptions require separate application to DVLA in most cases.
Conclusion
Car tax guide UK: VED is based on CO2. From £0 to £2,605 first-year. Standard £190/year from year 2. Use our car tax calculator to find your exact rate.