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UK car tax bands explained

Studio shot of a new carIn those smoggy old days when the environment wasn’t such an issue, drivers coughed up a flat-rate car tax, regardless of a vehicle’s emissions. But things began to change with the 1999 Budget, which announced a lower rate for cars with engines up to 1100 cc, as they, in general, had less of an impact on climate change. And since 1 March 2001, vehicle excise duty (VED) has been set on a sliding scale according to CO2 emissions, with the lower a car’s emissions, the lower the tax payable.

In fact, because personal car travel produces some 13% of the UK’s total greenhouse gas emissions, the government is so keen to get us driving green that it’s currently possible to pay zero road tax if you opt for a car that sits in the lowest CO2 emissions band. Something to consider if you’re trying to drive down the cost of motoring.

But what exactly is the lowest band, and how much do you have to pay if your car sits in one of the other dozen car tax groups? Read on for the answers...  

Car Tax Bands & Annual Cost*

Car tax bands
BandCO2 emissions (g/km)Cost from May 2009Cost from May 2009 (alternative fuel car)Cost from April 2010Cost from April 2010 (alternative fuel car)First year cost from April 2010First year cost from April 2010 (alternative fuel car)
A Up to 100 £0 £0 £0 £0 £0 £0
B 101-110 £35 £15 £20 £10 £0 £0
C 111-120 £35 £15 £30 £20 £0 £0
D 121-130 £120 £100 £90 £80 £0 £0
E 131-140 £125 £100 £110 £100 £110 £100
F 141-150 £125 £105 £125 £115 £125 £115
G 151-165 £150 £130 £155 £145 £155 £145
H 166-175 £175 £155 £180 £170 £250 £240
I 176-185 £175 £155 £200 £190 £300 £290
J 186-200 £215 £200 £235 £225 £425 £415
K 201-225 £215 £200 £245 £235 £550 £540
L 226-255 £405 £390 £425 £415 £750 £740
M Over 255 £405 £390 £435 £425 £950 £940

Table data from Directgov

Alternative Fuel Cars

If you think of conventional fuel cars as being petrol or diesel driven, alternative fuel cars are those powered by such means as electricity, gas, bio-fuel or hybrid engines. You could get a further discount if your car runs on alternative fuel (columns 4 & 6), though this benefit will disappear in 2011, when rates fall into line with the standard car tax rate.

2010 Changes

From April 2010, car tax costs for most bands will change, plus a new first year rate will be introduced – the so-called ‘showroom tax’ (columns 7 & 8). This is levied on brand new cars bought from April 2010, and lasts for the first year that the car is on the road. The showroom tax means significant increases for cars parked within Bands H-M – the more polluting cars – before reverting to the standard rate.

For example, a petrol or diesel Band M car that is bought new in May 2010 will cost £950 to tax for the first year, and then revert to £435 a year from May 2011.

The showroom tax also means savings for cars in Band B-D, which will have zero VED as an incentive for drivers to go green at the point of purchase.

Tax for Older Cars

If your car was registered prior to 01/03/01, ignore all of the above (though thanks for reading this far!) – instead you’ll pay car tax based on engine size.

Tax for older cars
Engine size12 months cost from May 200912 months cost from April 2010
Engine Size 12 Months Cost 12 Months Cost
Less than 1550 cc £125 £125
1550 cc and over £190 £205

Ways to Pay Car Tax

You can pay vehicle excise duty online, by phone, at a Post Office, or by post. Online is your quickest and easiest option, and you’ll need the reference number from your V11 reminder or registration certificate (V5C) and a valid card with which to pay. You can also pay by phoning 0300 123 4321, in person at Post Office branches that issue tax discs, or by post to the address shown on the V11 (you should automatically receive this a few weeks before renewal).

Buying a New Car?

So if you’re thinking of buying a low-emissions car and want to know its VED cost, you can follow the link to check new car tax bands. And don’t forget, you can save more on your car’s annual running costs by finding cheap car insurance.

* Rates apply to cars registered since 01/03/01. Your car’s CO2 emission details can be found in the registration certificate (V5C). Note that Band K includes cars over 225g/km CO2, but registered before 23/03/06. Visit Directgov to see tax rates/bands for other types of vehicle.

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