Car tax, officially vehicle excise duty, is worked out mainly from the date a car was first registered. Cars registered from 1 April 2017 pay a flat standard rate of £200 a year after the first year, plus a supplement if they cost more than £40,000 new. Cars registered between 1 March 2001 and 31 March 2017 pay by CO2 band, and older cars pay by engine size.
That means two cars that look alike can pay very different amounts. Before you buy, it is worth knowing which system a car falls under and what it will cost you each year.
The three systems at a glance
| First registered | How tax is worked out | Annual rate |
|---|---|---|
| Before 1 March 2001 | Engine size | £230 up to 1,549cc, £375 above |
| 1 March 2001 to 31 March 2017 | CO2 band, A to M | £20 (band A) to £790 (band M) |
| From 1 April 2017 | Standard rate after the first year | £200, plus £440 if the list price was over £40,000 |
Rates change each April, so treat these as the current figures rather than fixed ones.
Cars registered from 1 April 2017
For newer cars, CO2 only affects the first year's tax, which is normally paid when the car is sold new. From the second year onwards, every petrol, diesel, hybrid and electric car pays the same standard rate of £200 a year.
The exception is the expensive car supplement. A car with a list price over £40,000 pays an extra £440 a year, so £640 in total, for five years from the second time it is taxed. After those five years it drops back to the standard rate.
Two points catch buyers out:
- It is the list price, not the price you pay. A used car you buy for £20,000 still pays the supplement if it cost more than £40,000 new.
- Options count. A car whose basic price was under £40,000 can go over the limit once factory options are added, so two cars of the same model can pay different amounts.
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Cars registered 1 March 2001 to 31 March 2017
These cars pay by CO2 band, based on the official emissions figure in grams per kilometre. There are thirteen bands, A to M. The lower the emissions, the less you pay, and the gap between the ends of the scale is wide.
| Band | CO2 (g/km) | Annual rate |
|---|---|---|
| A | Up to 100 | £20 |
| D | 121 to 130 | £170 |
| M | Over 255 | £790 |
The other bands sit between these. A small petrol or diesel hatchback from this period may be in one of the lower bands, while a large engine, older 4x4 or performance car can be near the top. For some cars in this group, the tax is cheaper than the £200 standard rate that applies to newer ones.
Cars registered before 1 March 2001
Older cars pay by engine size: £230 a year for engines up to 1,549cc and £375 a year for anything larger. CO2 makes no difference.
Cars built more than 40 years ago can go into the historic tax class, which is free. You still have to tax the car each year, you just pay nothing.
Electric cars
Electric cars used to be free to tax. Since 1 April 2025 they pay vehicle tax like any other car: electric cars registered from 1 April 2017 pay the standard rate after the first year, and older ones pay the band A rate. Electric cars registered before 1 April 2025 do not pay the expensive car supplement, however high their list price was. If you are looking at a used electric car, our guide to buying a used electric car covers the other things to check.
How to find a car's tax band and rate
There are a few ways to work out what a car will cost to tax:
- Check the date of first registration. It tells you which of the three systems applies. It is on the V5C and on the DVLA record.
- Find the CO2 figure. For a car registered between 2001 and 2017, the CO2 emissions figure on the V5C sets its band.
- Ask about the list price. For a car registered from April 2017 that was expensive new, ask the seller whether it pays the supplement. A dealer should know.
Our car tax check shows whether a car is currently taxed, when the tax is due and the CO2 figure where DVLA holds one, from the registration alone. It is part of the free check.
Paying the tax when you buy
Tax does not transfer to a new keeper. When a car is sold, the seller gets a refund for any full months left, and you must tax it in your name before you drive it away. You can pay for 12 months, 6 months, or monthly by Direct Debit. Paying monthly costs a little more overall.
If the seller has declared the car off the road, the rules are slightly different. Our guide to what SORN means explains what to do before you drive a SORN car.
Common questions
Does car tax transfer when I buy a used car?
No. Tax does not pass to a new keeper. The seller gets a refund for any full months left, and you must tax the car in your name before you drive it.
Why does my car pay £200 when an older one with the same engine pays less?
Cars first registered from 1 April 2017 pay a flat standard rate after the first year, whatever their emissions. Cars registered between 1 March 2001 and 31 March 2017 still pay by CO2 band, so a low emission older car can pay much less.
Does the £40,000 supplement depend on what I paid for the car?
No. It is based on the car's list price when new, including options, not the price you pay for it used. It applies for five years from the second time the car is taxed.
Do electric cars pay car tax?
Yes. Electric cars have paid vehicle tax since 1 April 2025, at the standard rate after the first year. Electric cars registered before 1 April 2025 do not pay the expensive car supplement.
Written by James Parry. Last reviewed 11 November 2026. Contains public sector information licensed under the Open Government Licence v3.0.