• How Does UK Road Tax Work?

How Does UK Road Tax Work?

A Breakdown of the Costs and Rules

Owning and running a car comes with associated legal obligations, like having it MOT’d, paying car insurance, and paying road tax. This last one is a process that it’s worth us explaining, as there are a few different aspects to it depending on what car you own - and how old it is! At West Motors we make sure we keep up to date with the rules and regulations of road tax (or Vehicle Excise Duty, as it’s officially known), so that we can explain how it works to our customers. Read on to find out more.  

How does road tax work in the UK? 

Road tax is a fee paid annually to the DVLA by car owners in order for them to legally travel on Britain’s road network. 

The road tax system used to work through physical ‘tax discs’ displayed in the windscreen of each vehicle, but it’s now digitised, whereby ANPR cameras will pick up when a vehicle isn’t taxed by cross-referencing it against a database. 

What is road tax used for?

All road tax gets paid into a central fund, from which a range of public services and projects can be funded, and this can include the upkeep of roads. 

What cars need to be taxed?

Every car being driven on UK roads needs to be taxed, with a few exceptions - even if the amount required to tax your vehicle is £0, you must still go through the tax process to be legally able to use the road.  

If your vehicle is kept off-road and isn’t being driven, it needs to be declared SORN, which is a Statutory Off Road Notification. You must then reapply for and pay tax before it hits the highway once again. 

What cars are exempt from paying road tax? 

  • Cars registered between 1st March 2001 and before 1st April 2017 that produce less than 100 grams of carbon dioxide emissions per KM driven. 
  • Cars older than 40 
  • New cars that produce no carbon dioxide emissions - that’s pure electric vehicles (until 1st April 2025) 

How much is road tax at the moment?  

How much you pay for road tax will depend on when your car was registered, its engine size, and/or the amount of CO2 emissions it emits. 

Your vehicle is eligible for tax when it’s first registered, and if your car is over 3 years old, you’ll need a valid MOT certificate in order to do this. 

You’ll need to make sure there’s suitable insurance set up for your car when you apply for tax - this, alongside the MOT, will be confirmed electronically before you can tax the car. 

In 2020, Vehicle Excise Duty bands were changed. This means that the amount of road tax you pay will depend on when your car was first registered…

Cars registered after 1st April 2017

For the first twelve months from the date of registration, the cost of vehicle tax will depend on the CO2 emissions the car produces. 

In year 2 and beyond, it will then be due at a different rate. and can be paid in 6-month intervals, or annually, whichever you choose. The rates are as follows: 

CO2 emissions (g/km)

Rate for first year

Standard rate thereafter




1 - 50



51 - 75



76 - 90



91 - 100



101 - 110



111 - 130



131 - 150



151 - 170



171 - 190



191 - 225



226 - 255



Over 255



If the vehicle has a list price of £40K or more (including optional extras), there is an additional £355 to pay per year, unless the vehicle produces 0 emissions (until April 1st 2025), and this is due from years 2-5 following registration. 

Cars registered between 1st March 2001 and 1 April 2017 

For vehicles registered within this window, there are various tax bands that apply, depending on the fuel type and CO2 emissions of that vehicle. This was set up to incentivise the purchase of ‘greener’ vehicles. 

These bands are as follows:

Vehicle Tax Band

CO2 emissions

Annual tax rate


Up to 100g/km




































Over 255g/km


Vehicles registered before 1st March 2001

For cars that this applies to, the cost of your road tax is based on its engine size. 

Engines under 1549: £180 per year. 

Engines over 1549: £295 per year. 

How is road tax changing? 

Road tax will be changing on April 1st 2025, and this change affects electric cars. Until that point, a perk of electric car ownership will be £0 road tax. However, in an exercise in fairness to reflect the boom in the popularity of electric cars, the Government has announced that owners of zero-emission vehicles WILL need to pay road tax. 

If your electric vehicle was registered before 1st April 2017, you’ll pay £20 from 2025. If your vehicle was registered after 1st April 2017, you’ll pay £165 per year - it seems like this is inclusive of hybrid vehicles too. 

The ‘expensive car payment’ will also start applying to electric vehicles; that’s that additional £355 we talked about earlier for vehicles with a list price over £40K. This applies from year 2 to year 5 following registration. 

How does road tax work when buying a new car?

Road tax is no longer transferable with the vehicle; it sticks with the owner. Therefore, you’ll have to tax a used vehicle for a year from the day you take ownership of it. 

If you’ve paid a year’s worth of tax on a vehicle you’re getting rid of, you can apply to the DVLA for a refund for the tax that will go unused. 

Finding your next car at West Motors 

At West Motors, we want your main concern to be which car to go for, which is why we can offer help and advice with taxing the one you decide on. We’re keen to make the whole experience smooth and fun; get started by browsing our premium vehicles online today.

To save timely negotiation all our cars are heavily discounted upfront and offered nearer cost price, saving customers up to £2000 when compared to our competition. This ensures we are treating every customer the same. This fee is a compulsory fee and applies to all customers.

Variable admin fee is charged as listed below:

  1. Retail customers pay £199.
  2. Repeat customers purchasing a 2nd car within 12 months of the original invoice date £0
  3. Retail customers arranging finance using brokers outside of our immediate panel of lenders £499
  4. Trade customers making a purchase as the motor trade £549
  5. Export customers including Northern Ireland and the Republic of Ireland £599