Your choice of fuel type has a direct impact on how much road tax you pay. The VED system is primarily based on CO2 emissions — and different fuel types produce different emissions profiles that determine your tax band and first-year rate.
Petrol Cars and VED
Petrol cars cover a wide range of CO2 emissions, from sub-100g/km efficient hatchbacks to high-performance sports cars exceeding 300g/km. The VED system places petrol cars in bands from Band A (£0 first year) to Band M (£2,605 first year for cars over 255g/km). In the standard rate years, most petrol cars pay either £180 or £200 depending on their emissions band. The fuel type itself does not change the rate — only the emissions matter for tax purposes.
Diesel Cars and the Supplement
Diesel cars face a higher first-year rate than equivalent petrol cars due to the diesel supplement. This applies to all diesel cars that are not official alternatively fuelled vehicles — adding an extra charge on top of the standard CO2-based rate. From April 2025, diesel cars that are not alternatively fuelled pay an additional supplement in the first-year rate. This means a diesel car with the same CO2 emissions as a petrol car will typically cost more in the first-year tax bill.
Hybrid Vehicles and Tax
Self-charging hybrids — vehicles with both a combustion engine and an electric motor — are treated as petrol or diesel vehicles for VED purposes based on their CO2 emissions. The electric assistance reduces fuel consumption but does not eliminate the CO2 emissions that determine the tax rate. The emissions figure recorded on the V5C is used to calculate VED, regardless of the hybrid system's contribution. Plug-in hybrids with very low CO2 figures (£0 to £10 first-year rate) benefit most in the first year.
Long-Term Fuel Type Cost Comparison
When calculating the lifetime cost of road tax by fuel type, electric vehicles come out ahead with zero standard rate VED. Hybrids pay standard rates once the first-year period expires — typically £180. Diesel cars pay a slightly higher standard rate in some bands. The fuel type choice also affects other costs — diesel vehicles may have better fuel economy, while petrol vehicles often have lower maintenance costs. The total cost of ownership should include VED alongside fuel, insurance, and maintenance.
Fuel Type and Future Tax Policy
As the UK moves towards 2030 when new petrol and diesel car sales end, the fuel type question will become simpler — by 2035, all new cars must be zero-emission at the tailpipe. The tax implications of different fuel types will diminish as EVs dominate new car sales. However, the existing fleet of petrol, diesel, and hybrid vehicles will remain on the roads for decades, meaning the current fuel-based tax distinctions will persist for many years.