Vehicle excise duty

Vehicle excise duty is an annual tax in the United Kingdom that is levied as an excise duty. The VED must be paid for most types of powered vehicles which are to be used or parked on public roads. Registered vehicles that are not being used or parked on public roads and which have been taxed since 31 January 1998 must be covered by a Statutory Off Road Notification to avoid VED. In 2016, VED generated approximately £6 billion for the Exchequer.
A vehicle tax was first introduced in Britain in 1888. In 1920, an excise duty was introduced that specifically applied to motor vehicles; initially it was hypothecated for road construction and paid directly into a special Road Fund. After 1937, this reservation of vehicle revenue for roads was ended, and instead the revenue was paid into the Consolidated Fund – the general pot of money held by government. Since then, maintenance of the UK road network has been funded out of general taxation, of which VED is a part.

Current regulations

VED across the United Kingdom is collected and enforced by the Driver and Vehicle Licensing Agency. Until 2014, VED in Northern Ireland was collected by the Driver and Vehicle Agency there; responsibility has since been transferred to the DVLA.
The registered keeper of a vehicle that is liable for VED must pay the appropriate VED amount to license the vehicle for road use. Owners of registered vehicles which have been licensed since 31 January 1998 and who do not now wish to use or store a vehicle on the public highway are not required to pay VED, but are required to submit an annual Statutory Off-Road Notification. Failure to submit a SORN is punishable in the same manner as failure to pay duty when using the vehicle on public roads.
Until 1 October 2014 a vehicle licence had to be displayed on a vehicle as evidence of having paid the duty. Since that date, the circular paper discs have not been issued and there is no longer a requirement to display a disc as the records are now stored in a centralised database and accessible using the vehicle registration plate details.

Cars

There are three payment schedules in effect, depending on whether the car was first registered before or after 1 April 2017, or before 1 March 2001. Further changes took effect in April 2025, affecting new and existing electric vehicles.

Registered before 1 March 2001

For cars registered before 1 March 2001 the excise duty is based on engine size.

	Cost as of 1 April 2025
Vehicle engine size <1549 cc	220
Vehicle engine size >1549 cc	360

Registered before 1 April 2017

For vehicles registered between 1 March 2001 and 31 March 2017 charges are based on theoretical CO₂ emission rates per kilometre. The price structure was revised from 1 April 2013 to introduce an alternative charge for the first year. The "first year rate" only applies in the year the vehicle was first registered and is said by the government to be designed to send "a stronger signal to the buyer about the environmental implications of their car purchase".
Charges as applicable from 1 April 2025:

Car emission band	Standard cost	Notes
Band A	20
Band B	20
Band C	35
Band D	160
Band E	190
Band F	210
Band G	255
Band H	305
Band I	335
Band J	385
Band K	415	Also vehicles with >225 g/km registered before 23 March 2006.
Band L	710
Band M	735

Registered after 1 April 2017

The biggest changes from April 2017 were that hybrid vehicles were no longer rated at £0, and that cars with a retail price of £40,000 and over would pay a supplement for years 2 to 6.

	First year rate	Second year onwards rate
emissions	Diesel cars that meet the RDE2 standard, petrol cars, Alternative fuel and zero emission cars
0 g/km	£10	£195
1 to 50 g/km	£110	£195
51 to 75 g/km	£130	£195
76 to 90 g/km	£270	£195
91 to 100 g/km	£350	£195
101 to 110 g/km	£390	£195
111 to 130 g/km	£440	£195
131 to 150 g/km	£540	£195
151 to 170 g/km	£1,360	£195
171 to 190 g/km	£2,190	£195
191 to 225 g/km	£3,300	£195
226 to 255 g/km	£4,680	£195
Over 255 g/km	£5,490	£195

For cars with a "list price" over £40,000 an additional amount – the 'expensive car supplement' – is paid at the first five annual renewals, i.e. in years 2 to 6 of the vehicle's life. At first the supplement applied to all types of car, but the 2020 Budget provided an exemption for zero-emission vehicles, effective from 1 April 2020; this exemption ended in April 2025. The supplement increases each year, and is £425 from April 2025.

Changes on 1 April 2025

In November 2022, the UK government announced that reduced tax rates for zero-emission vehicles would cease on 1 April 2025, making rates the same as for those with internal combustion engines. The changes affect new and existing vehicles as follows:

Zero-emission cars first registered on or after 1 April 2017 will pay the 1–50g/km rate in their first year of registration, and the standard annual rate in subsequent years.
The £10 reduction for alternative fuel vehicles and hybrid vehicles will be removed, bringing them also onto the standard rate.
The exemption from the expensive car supplement was already due to end in 2025.
Other vehicle tax rates

Light goods vehicles (TC39)

Registered on or after 1 March 2001 and not over 3,500 kg revenue weight.

Single 12 month payment	Single 12 month payment by Direct Debit	Total of 12 monthly instalments by Direct Debit	Single 6 month payment	6 months by Direct Debit
£290	£290	£304.50	£159.50	£152.25

Euro 4 light goods vehicles (TC36)

Registered between 1 March 2003 and 31 December 2006, Euro 4 compliant and not over 3,500 kg revenue weight.

Single 12 month payment	Single 12 month payment by Direct Debit	Total of 12 monthly instalments by Direct Debit	Single 6 month payment	6 months by Direct Debit
£140	£140	£147	£77	£73.50

Euro 5 light goods vehicles (TC36)

Registered between 1 January 2009 and 31 December 2010, Euro 5 compliant and not over 3,500 kg revenue weight.

Single 12 month payment	Single 12 month payment by Direct Debit	Total of 12 monthly instalments by Direct Debit	Single 6 month payment	6 months by Direct Debit
£140	£140	£147	£77	£73.50

Motorcycle (with or without sidecar) (TC17)

Tricycles (not over 450 kg unladen) (TC50)

Trade licences

Trade licences are available for between 6 and 12 months, depending on the month in which the application is made.

Issue month	Expiry month	Period	Rate	Rate
January	June	6 months	£94.05	£65.55
January	December	12 months	£171	£121
February	December	11 months	£171	£121
March	December	10 months	£156.75	£110.90
April	December	9 months	£141.05	£99.80
May	December	8 months	£125.40	£88.75
June	December	7 months	£109.70	£77.65
July	December	6 months	£94.05	£66.55
August	June	11 months	£171	£121
September	June	10 months	£156.75	£110.90
October	June	9 months	£141.05	£99.80
November	June	8 months	£125.40	£88.75
December	June	7 months	£109.70	£77.65

Heavy goods vehicles

VED payable for heavy goods vehicles varies according to their weight and axle configuration. The 12-month rates applicable from 1 August 2023 range from £80 to £850.
An additional HGV levy for vehicles with a revenue weight of 12,000 kg or more was introduced with effect from 1 April 2014. The levy is paid at the same time as VED, the amount varying according to weight, axle configuration and emissions rating; there are higher levies for vehicles pulling a trailer of over 4,000 kg. The 12-month levies applicable from 1 August 2023 range from £150 to £749.
Vehicles over 12,000 kg that are not registered in the UK must also pay the HGV levy before entering the UK, although zero-emission vehicles are exempt. Payment can be made on a daily, weekly, monthly or annual basis. The rate ranges from £3 per day to £10 per day.
The HGV levy was suspended from 1 August 2020 to 31 July 2023 to support the haulage sector and aid pandemic recovery efforts.