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ROAD TAX COSTS (Vehicle Excise Duty)

If you're a UK resident and drive a vehicle, you'll know that you have to pay something called Vehicle Excise Duty (VED), or as we all know it, Road Tax. For those of you who have business vehicles, you might know this as Benefit In Kind (BIK), which applies to your company cars

The amount of road tax you pay depends on multiple factors. Elements that can influence your road tax prices are;

  • Engine size
  • Fuel type and;
  • The amount of CO2 your vehicle outputs when it first set foot on the road

In simple terms, if your vehicle has a bigger engine, it will be producing more CO2 emissions, meaning that you are liable to pay more tax for the running of that vehicle. Currently, diesel drivers pay more road tax than petrol users, with electric vehicle owners having to pay absolutely nothing as they're not contributing to CO2 emissions.

How is road tax measured?

Previously, this test used to be measured through the NEDC (New European Driving Cycle), which was developed in the 1990s but became outdated due to the rise in advanced technology applied into modern vehicles.

Now, WLTP (Worldwide Harmonised Light Vehicles Test Procedure) replaces the old NEDC, and this method can give you a more realistic evaluation of your vehicles MPG and CO2 emissions. Tests included in the new WLTP calculations are;

  • Driving on urban and suburban roads, plus motorways and main roads
  • Longer test distances
  • More realistic ambient temperatures
  • Higher average and maximum speeds and drive power
  • More realistic driving behaviour

So, what's changed recently?

On April 1st, 2020, the way your road tax is calculated changed. To see what you're new tax band is, check out our news article HERE to see where your vehicle stands in the VED increase.

First tax payment when you register the vehicle

VED Band CO2 Emission (g/km)Diesel Cars (TC49) that meet the
RDE2 standard and petrol cars (TC48)
All other diesel cars (TC49)
Alternative Fuel Cars (TC59)
A 0£0£0£0
B 1-50£10£25£0
C 51-75£25£115£15
D 76-90£115£140£105
E 91-100£140£160£130
F 101-110£160£180£150
G 111-130£180£220£170
H 131-150£220£555£210
I 151-170£555£895£545
J 171-190£895£1,345£885
K 191-225£1,345£1,910£1,335
L 226-255£1,910£2,245£1,900
M Over 255£2,245£2,245£2,235

Rates for second tax payment onwards

Fuel TypeSingle 12 month paymentSingle 12 month payment by Direct Debit
Total of 12 monthly payment by Direct Debit Single 6 month payment Single 6 month payment by Direct Debit
Petrol or Diesel£155£155£162.75£85.25£81.38

Vehicles with a list price of more than £40,000 will have to pay an extra £335 a year to the rate listed above. You only have to pay this rate for 5 years (from the second time the vehicle is taxed).