UK road tax (VED) bands explained 2026

Vehicle Excise Duty (VED), commonly known as road tax, is a tax that drivers in the UK must pay to use their vehicles on public roads. The amount you pay depends on various factors, including when your car was registered and its emissions. This article explains how VED works for cars registered before and after April 2017, current rates, and how to budget for your annual tax.

Understanding VED for Cars Registered Before April 2017

For cars registered before April 2017, the VED system is based primarily on engine size. Vehicles are placed into one of several bands, with larger engines typically incurring higher charges. The rates can range from around £0 for vehicles with smaller engines to over £500 for those with larger capacities.

This system rewards drivers of smaller, more efficient vehicles, while penalising those with larger, less efficient engines. It is important to check the specific band for your vehicle to understand your annual tax obligations.

VED Rates for Cars Registered After April 2017

Cars registered after April 2017 are taxed based on their CO2 emissions. The first year of registration incurs a higher rate that varies according to emissions, while subsequent years have a standard rate. For example, cars emitting up to 100g/km of CO2 may pay around £0 in the first year, while those emitting over 200g/km could face charges exceeding £600.

This change was introduced to encourage the purchase of low-emission vehicles and to reduce the overall environmental impact of road transport. Understanding your vehicle’s emissions is crucial for budgeting your VED costs accurately.

The £40,000 Supplement for Luxury Vehicles

Vehicles with a list price of over £40,000 are subject to an additional supplement after the first year of registration. This supplement adds around £325 to the annual VED charge for five years. This means that even if a vehicle qualifies for a lower emissions band, the owner will still pay a premium due to the vehicle’s initial price.

This regulation aims to target luxury vehicles, ensuring that those who can afford high-end cars contribute more towards road maintenance and environmental initiatives. It is advisable to factor this supplement into your budget if you are considering purchasing a vehicle in this price range.

Current VED Rates for 2026

As of 2026, the VED rates are subject to annual adjustments, typically in line with inflation. For cars registered after April 2017, the standard rate is around £165 per year for most vehicles, while the first-year rates can vary significantly based on emissions.

For example, a vehicle emitting 130g/km might incur a first-year charge of approximately £200, followed by the standard rate in subsequent years. It is important to stay informed about any changes to these rates, as they can impact your overall vehicle ownership costs.

Budgeting for Annual VED Payments

When budgeting for your vehicle expenses, it is essential to include VED as a significant cost. Depending on your vehicle’s registration date and emissions, you could be looking at annual payments ranging from £0 to over £600.

To ensure you are prepared, check your vehicle’s band and calculate the expected VED based on current rates. Setting aside funds monthly can help you manage this expense without financial strain when the renewal date approaches.

How to Check Your Vehicle’s VED Band

To find out your vehicle’s VED band, you can use the DVLA’s online services or consult your vehicle registration document. This information will provide clarity on your annual tax obligations and help you make informed decisions regarding vehicle purchases or changes.

Understanding your VED band is crucial for budgeting and ensuring compliance with UK regulations. Keeping up to date with any changes in the VED system will also help you avoid unexpected costs in the future.