Car tax 2025: The new VED rates explained

The new Vehicle Excise Duty (VED) rates for 2025/2026 are here. The standard rate has increased by £5 to £195 per year. First-year rates have gone up too.

If your car was registered before April 2017, you’ll likely pay more. Owners of higher-polluting vehicles could see their VED costs rise by up to £70.

Here are the updated rates for 2025/2026 and answers to common car tax questions.

First year VED rates for 2025/26

When you buy a brand-new car, you’ll pay a first-year rate of vehicle excise duty (VED). This is based on your car’s CO2 emissions. Higher emissions usually mean a higher tax bill. The first year rate is designed to encourage buyers to choose low or zero-emission cars.

From the second year onwards, most cars move to a standard rate. Some vehicles over £40,000 pay an extra supplement for five years after the first year.

Below are the updated first year VED rates for petrol, diesel¹, alternative fuel and zero emission cars registered on or after 1 April 2025. 

After the first year, all petrol and diesel cars registered after April 2017 have to pay a flat fee of £190 a year. This is up from £180 in 2023/2024.

For petrol and diesel cars priced over £40,000, there's an extra £390 to pay on top of the first year rate. Drivers have to pay this on the second and sixth year of ownership on top of the standard VED rate.

¹Diesel cars tested to RDE2 standards

Prices will differ for diesel cars that are tested to RDE standards.

Annual standard rates

After the first year

• All petrol and diesel cars registered after April 2017 have to pay a flat fee of £195 a year. This is up from £190 last year.
• New zero emission cars registered from 1 April 2025 will pay £10 in the first year. After that, they’ll pay the standard £195 annual rate.
• Zero emission cars registered between 1 April 2017 and 31 March 2025 will pay the standard £195 annual rate from 1 April 2025.

Cars priced over £40,000, there's an extra £410 to pay annually—up from £390 in 2024/2025. This payment lasts for 5 years, starting from the second year of registration.

VED tax cost for cars registered before April 2017

If your car was registered on or after 1 March 2001 and before 1 April 2017, your VED is based on CO2 emissions. Here are the latest annual rates for the 2025/26 tax year:

²This includes cars with a CO2 figure over 225g/km but were registered before 23 March 2006.

What tax band is my car in?

To find out which car tax band you’re in visit the GOV.UK website. You can find the emissions of both new and used cars.

You can also check your vehicle tax status using our car tax checker tool.

VED changes for EVs

From April 2025, EVs will EVs will no longer be exempt from VED. This change means all EV owners will need to pay car tax, with rates depending on the vehicle's registration date.

What cars are exempt from paying VED?

You’re exempt from paying VED if your car is:

• More than 40 years old
• Used by a person who has an eligible disability
• Used by an organisation that provides transport for people who have an eligible disability
• An agricultural vehicle
• Has a Statutory Off-Road Notice (SORN) attached to it

Even if you're exempt from paying VED, you still need to tax your car.

VED tax and car insurance

You can't tax your car if you don't have car insurance. When you apply for tax, the DVLA checks whether your car has a valid MOT and insurance. If it doesn't you can't tax your car.

Without tax, you risk:

• An £80 fine. This can be reduced to £40 if pay within a certain time period.
• A £1,000 fine if caught driving without tax
• Vehicle clamping by the DVLA

And if you don't have valid car insurance, you could face even tougher measures. So before you tax your car, check your car is insured.

If you sell your car and cancel your insurance, you'll also be eligible for a car tax refund depending on how many months of remaining tax you've already paid for.

Figures taken from What Car? https://www.whatcar.com/advice/owning/how-much-is-car-tax-ved-rates-explained/n1153