2022 VED tax bands explained | AutoTrader (2022)

New VED rates 2022

The amount of tax you pay on your car is determined by a number of factors including the engine size, the year your car was registered and the level of CO2 emissions.
When the vehicle is first registered, you’ll pay for the first 12 months of tax. After this, you’ll pay the standard rate of tax every year. New VED rates are announced in each Spring Budget, and this year the new tax rates on vehicles come into effect from 1 April 2022. So, what’s changed in the 2022/2023 financial year?The first year VED you pay on newly registered vehicles has increased:•Cars that produce 0g/km of CO2 will pay £0 in VED (you’ll still need to register the vehicle as taxed though)•Cars that produce 1-50g/km of CO2 now have a first-year rate of £10•Cars that produce 51-75g/km now have a first-year rate of £25•Cars that produce 76-90g/km now have a first-year rate of £120•Cars that produce 91-100g/km now have a first-year rate of £150•Cars that produce 101-110g/km now have a first-year rate of £170•Cars that produce 111-130g/km now have a first-year rate of £190•Cars that produce 131-150g/km now have a first-year rate of £230•Cars that produce 151-170g/km now have a first-year rate of £585•Cars that produce 171-190g/km now have a first-year rate of £945•Cars that produce 191-225g/km now have a first-year rate of £1,420•Cars that produce 226-255g/km now have a first-year rate of £2,015•Cars that produce anything above 255g/km now have a first-year rate of £2,365If your car was registered after 2017, the standard rate of VED you’ll pay after year one has increased by 6 per cent - from £155 to £165. So, after the first year, you’ll pay £165 per year.If your new car had a list price of £40,000 or more, you’ll pay additional rate tax, or premium car tax, which is going up by £20 to £355, or £520 per year in total. You’ll pay this for the first five years after the car’s registration. Alternatively-fuelled vehicles (like hybrids or LPG vehicles), will pay £155 per year in additional rate tax, or £510 per year in total.Electric cars are exempt from paying additional rate tax this year.

What does first year road tax/VED mean?

This first-year payment is calculated using the vehicle’s CO2 emissions, which are measured using WLTP test standards. The level of emissions is recorded as g/km of CO2 emitted.
Cars with 0g/km of CO2 emissions have to pay nothing in the first year. At the other end of the spectrum, vehicles emitting more than 255g/km have to pay up to £2,365 in the first year. The first year's road tax/VED is usually covered in the car's 'on-the-road' price. This means it's absorbed into the overall cost of the car, so you don’t have to shell out up to £2,365 on top of everything else.

<3>Standard rate VED explained

After the first year, you’ll pay VED every six or 12 months at the “standard” rate.
From the second year onwards, you’ll pay £165 a year for anything other than zero emissions vehicles, for which you’ll pay £0 in VED.

Additional rate of VED explained

If the car has a manufacturer’s list price of over £40,000, you’ll have to pay a new additional rate of £355 on top of the standard rate for five years. This kicks in when you pay your second lot of VED (i.e. after the first year is complete).
After this five-year period, the vehicle will be taxed at the standard rate for that type of vehicle. Think carefully about options when you’re buying a new car. The rate of VED is calculated on the list price of a car, so it’ll include any options you add. If you’re buying a £39,000 car and pop a few extras on, you could send the list price over £40,000 and have to pay the £355 supplement. Zero-emission vehicles are currently exempt from the additional rate.

Used car VED rates 2022

Used cars could be anything from a month old to over 50 years old. The amount of VED you pay for a used car depends on when the vehicle was first registered.

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How much is VED on a used car?

If your used car was registered after 1 April 2017

You will pay the standard rate: £140 for petrol or diesel, £130 for alternatively fuelled cars and £0 for fully electric.
The £355 supplement for cars that cost over £40,000 will apply every year until the car is six years old.

If your used car was registered between 1 March 2001 and 31 March 2017

Cars registered between 1 March 2001 and 31 March 2017 are banded according to their CO2 emissions. The amount of you depends on how you pay – with options including monthly direct debits and full yearly payments.
Prices range from £0 for Band A (vehicles that produce up to 100g/km) through to £649 for two single 6-month payments on a car in Band M (vehicles that produce over 255g/km). Note that cars that have a CO2 figure over 225g/km but were registered before 23 March 2006 are included in Band K – which costs between £330 and £363 (for two single 6-month payments) for the year.The full list is available on the Gov.uk website.

If your used car was registered before 1 March 2001

VED for cars registered before 1 March 2001 is based on engine size. Your vehicle handbook will tell you the exact capacity of your engine.
The total amount you pay will depend on how you pay (monthly, annually or direct debit) but expect to pay between £170 and £178.50 if your vehicle’s engine is 1549cc or smaller, and between £280 and £294 if the engine is over 1549cc.

Used car buyers also need to consider the new VED rules

The road tax rules that came into force in 2017 mean that used car buyers need to shop carefully, as the date a car is registered could have an effect on its value.
For example, a car registered on 1 March 2017 could cost less to run than an identical car registered a month later, making the older car more valuable. Related: how to transfer ownership and tax on used car.

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More information on VED tax rates

What is VED?

Vehicle Excise Duty, or VED, is a tax paid on the majority of vehicles used or parked on public roads in the UK. VED is also known as vehicle tax, car tax, showroom tax or road tax.
All cars must be registered for tax, though there are some exemptions to paying the tax.

How is vehicle excise duty calculated?

Vehicle excise duty is calculated using the vehicle’s age and CO2 emissions. Bigger, older engines tend to produce more CO2, and so you pay more tax on them.
Emissions are now measured using WLTP and RDE standards, which provide more accurate measures than the NEDC standards they replaced. As these standards are stricter and more accurate, cars are more likely to record higher emissions and thus be liable for more tax.

What does VED pay for?

A question every taxpayer has asked at least once: what does road tax pay for?
When VED was introduced back in 1920, it was used to pay for road maintenance. Over the years, roads got busier and the tax didn’t cover it, so now the money raised by VED goes into the consolidated fund of 1926. This is a government fund, which contributes towards local projects and infrastructure. Roads are normally covered by council tax.

Are any cars exempt from VED?

Some cars are free to tax. Even if you don’t have to pay tax, you must still register your vehicle for tax.

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Zero and low emission vehicles

Zero emission vehicles, including electric cars and hydrogen-powered vehicles pay zero road tax.
Cars registered between 1 March 2001 and 1 April 2017 that produce less than 100 grams and CO2 per kilometre driven are also exempt from paying VED.

Cars that are 40 years old or more

If a car is over 40 years old (from their date of manufacture, not date of first registration) then it can be classed as tax exempt.
The exemption comes into effect every April, so April 2021 saw all cars built prior to 1 January 1981 become exempt. To be exempt, your car will need to be classified as a historic vehicle. You can do this at a Post Office, and you’ll need to take:• your log book (V5C form – needs to be in your name)• a vehicle tax reminder letter (V11 form)• a valid MOT certificate or evidence your car is MOT-exempt (V112 form)

Drivers with disabilities

Drivers with disabilities may also be entitled to free VED if they meet the following criteria:
•Use a mobility scooter or similar•Receive the Disability Living Allowance mobility component’s higher rate•Receive a War Pensioner’s Mobility SupplementMore information is available on the Gov website.

What happens if you drive with no tax?

If you drive a car without tax, then you face fines of up to £1,000.
This fine applies even if the car is parked on the public road. If you have no intention of driving it for an extended period of time, you should declare it SORN (Statutory Off-Road Notification). Here’s how to SORN a car.The DVLA runs monthly checks of all vehicles registered in the UK. If your car is untaxed and not declared SORN, you’ll get an £80 fine in the post. If you pay it in 28 days, you should get a 50 per cent discount. If you don’t pay the fee, it’s increased. You could pay £1,000 if the case goes to court, and the DVLA can clamp your vehicle until you pay up.

Can I transfer tax as part of a sale?

Tax cannot be transferred, even if you give the car to a relative. The car needs to be taxed in the name of the new registered keeper.

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Can I get a tax refund?

If you have road tax left on your car when you sell or scrap it, DVLA will refund any complete months that remain.
This will be done automatically if you notify DVLA of the sale (use section nine of your registration certificate V5C) or you are issued with a Certificate of Destruction.You should get a cheque within six weeks, and it’ll be sent to the address on the registration certificate (V5C).

Do I need a tax disc?

No, vehicle tax discs were abolished in 2014. Nowadays, police use Automatic Number Plate Recognition (ANPR) cameras to scan registrations and check your tax status in the DVLA’s database.

Do you have to pay capital gains tax when selling a car?

You don’t have to pay capital gains tax when you privately sell a car. If you’re selling a business car, then you’ll have to pay capital gains tax as it’s a business asset.

Is there a grace period for tax?

No, the car must be taxed in your name when you drive it, even at the point of sale. You used to get a five-day grace period while you waited for your tax disc to arrive but everything is online these days, so it needs to be done straight away.

Why did the government change the tax system?

The government says the changes address unfairness in the old system, as reductions in the average CO2 emissions of cars mean owners of newer cars are paying less than owners of older cars. It also said the supplement on cars of more than £40,000 will ensure those who can afford the most expensive cars make a fair contribution.
Regarding the adoption of WLTP standards, WLTP tests are more rigorous, so they give more accurate CO2 emissions readings and better reflect how a car will perform on the road. Unfortunately, these readings are likely to be higher so your tax due will go up.Learn more about WLTP and RDE.

FAQs

Is VED the same as road tax? ›

Vehicle Excise Duty (VED) - also known as road tax, car tax, or the road fund licence - can be a confusing topic to understand, with a number of factors such as VED bands and their relative charges having undergone various significant changes over the years.

What is the highest car tax band? ›

Tax bands B to L relate to vehicle CO2 emissions of between 101 and 255 g/km, each band having a range 10-15 g/km. The highest tax band is band M for cars with CO2 emission more than 255 g/km.

How is UK road tax calculated? ›

Car tax rates are based on fuel type and CO2 emissions. There is a different way to find tax rates for other types of vehicle, including used cars. If you have the V5C reference number for a vehicle, it may be quicker to use the Get vehicle information from DVLA service.

How much is tax on a van UK? ›

The BIK tax value for vans is fixed at £3,600. So, if you pay 20% income tax, you'll pay £720 benefit in kind tax (20% of £3,600 = £720). And if you're a 40% taxpayer, you'll pay £1,440 (40% of £3,600 = £1,440).

How is VED calculated? ›

Vehicle excise duty is calculated using the vehicle's age and CO2 emissions. Bigger, older engines tend to produce more CO2, and so you pay more tax on them. Emissions are now measured using WLTP and RDE standards, which provide more accurate measures than the NEDC standards they replaced.

Will my road tax go up in 2022? ›

Road tax (VED) rates increased on 1 April 2022. Then-Chancellor Rishi Sunak announced his proposal in the autumn Budget 2021 that the duty would increase in line with the Retail Prices Index ( RPI ).

What is the most expensive car to tax UK? ›

What are the most expensive cars to tax?
  • The Lamborghini Aventador.
  • Bentley Continental GT Supersports.
  • Maserati GranTurismo.
  • Ferrari GTC Lusso.
  • Bentley Mulsanne.
  • Aston Martin Vantage.
  • Rolls Royce Dawn.
Jan 13, 2022

What does VED band mean? ›

Vehicle Excise Duty is linked directly to your car, van or motorhome and the cost varies depending on vehicle age, list price and CO2 emissions. The different rates are known as car tax bands, road tax bands or VED bands.

What does tax band a mean on a car? ›

Buying a car in tax band A that was registered between 1st March 2001 and 31st March 2017 will mean that you will be paying nothing in annual road tax.

What determines your road tax? ›

How is car tax calculated? The amount of car tax you need to pay depends on variables such as CO2 emissions, fuel type and engine size. As previously stated, electric vehicles are exempt, but hybrids are not. However, they may have a lower tax expense as they emit less emissions than petrol or diesel cars.

What cars are 30 pound a year road tax? ›

Cars with £30 road tax
  • Skoda Octavia.
  • Kia Sportage.
  • Vauxhall Corsa.
  • Mazda 6 Tourer.
  • Audi Q3.
  • Ford C-Max.
  • Audi A6.
  • Mini Convertible.

What is the CO2 rating of my car? ›

Where do I find the CO2 emissions rating for my car? If you look in your V5C registration certificate for your car, the emissions rating is listed there. Or, you can find the fuel consumption and emissions information for a new or used car on the government certificate agency website.

Is a Ford Ranger classed as a car or van? ›

So long as your 4x4 or SUV was created for social, domestic and pleasure use, it's classed as a car.

Can a van be taxed privately? ›

Taxing a van privately is easy. You just need to inform your local motor tax office that you are changing its use. You'll probably pay more in annual motor tax, as it goes by the engine size. Insuring a commercial vehicle privately is not so easy, annoyingly.

Do vans pay more road tax? ›

Unlike cars, where road tax cost varies with CO2 emissions, under current regulations all petrol and diesel vans are charged the same rate of tax. So whether it's a small van, a medium van or a large van, the tax cost is the same.

What are the new car tax changes for 2022? ›

Increase in first-year road tax rates

When motorists buy a new car, they must pay a first-year road tax rate based on the CO2 emissions of the vehicle. This is typically included in the car's on-the-road (OTR) price. For those looking to buy or lease a new car in 2022, the first-year tax rate increases from 1 April.

What cars are road tax exempt? ›

The only cars that are now exempt are the ones that produce zero emissions; electric vehicles, basically.

What does M1 mean on logbook? ›

There are different manuals for different types of vehicle: M1 vehicles - passenger cars. M2 and M3 vehicles - buses and coaches. N1 vehicles - light goods vehicles (up to 3,500kgs)

Is diesel car tax going up? ›

Vehicle Excise Duty (also known as vehicle tax, car tax or road tax) is set to rise in line with inflation from April 2022 and will see the cost of owning a petrol or diesel vehicle rise.

Does road tax increase every year? ›

2021 car tax (VED) increase

Vehicle excise duty (VED) rates tend to increase bit-by-bit every year, and the same is true of the tax-year beginning in April 2021, although the rate has been fixed for some low-emissions vehicles.

Do electric cars pay road tax? ›

light electric vehicles do not pay RUC as they are specifically exempted until 31 March 2024. heavy electric vehicles do not pay RUC as they are specifically exempted until 31 December 2025.

Do hybrid cars pay road tax UK? ›

Yes, hybrid cars have to pay road tax, but they get a lower rate than traditional full petrol or diesel cars. This is because hybrid cars still use traditional fuel as well as their electric motors, leading to CO2 emissions.

What does the price of road tax depend on? ›

The rate of tax you pay depends on the car's official CO2 emissions and the type of fuel it uses.

How much car tax do I pay UK? ›

First tax payment when you register the vehicle
CO2 emissionsDiesel cars (TC49) that meet the RDE2 standard and petrol cars (TC48)Alternative fuel cars (TC59)
1 to 50g/km£10£0
51 to 75g/km£25£15
76 to 90g/km£120£110
91 to 100g/km£150£140
9 more rows

How is tax on a company car calculated? ›

How is company car tax calculated? You'll be taxed at your income tax rate on a percentage of the car's P11D value, which is the list price minus the first year's Vehicle Excise Duty and the registration fee. The percentage is based on the amount of CO2 your car emits, with dirtier models costing more.

How old does a car have to be to be tax exempt? ›

Tax exemption for classic cars is now rolling. This means that from 1 April each year, vehicles manufactured more than 40 years before 1 January of that year are automatically exempt from paying Vehicle Excise Duty (VED), otherwise known as road tax.

What is DVLA band A? ›

In basic terms, the lower the CO2, the lower the tax band. Choose a car with CO2 emissions below 100g/km and you'll pay no road tax.
...
Tax bands for cars registered after March 2001 and before April 2017.
VED bandCO2 emissionsAnnual rate
AUp to 100g/km£0
B101-110g/km£20
C111-120g/km£30
D121-130g/km£135
9 more rows
Aug 5, 2022

What is a V11? ›

The V11 is an important document that is issued by the DVLA. If you are yet to pay road tax on your car, or apply for a SORN, then you may receive a V11. Despite its name being so similar to the V5C, the V11 is simply a letter sent as a reminder.

What is VED when buying a car? ›

VED stands for Vehicle Excise Duty, and is the term used to describe the tax you must pay if you own a car in the UK that is driven – or even parked – on a public road. VED is often referred to as road tax or car tax, and the amount you'll have to pay will depend on the car you drive.

What does VED mean on logbook? ›

The way Vehicle Excise Duty (VED) is calculated is changing for some vehicles registered from 1 April 2017.

What is the VED on my car? ›

Car tax is also known as vehicle excise duty (VED) and is a tax on the emissions your vehicle produces.

What does VED stand for? ›

General description of the measure. This measure reforms Vehicle Excise Duty ( VED ) for cars first registered from 1 April 2017 onwards. First Year Rates ( FYRs ) of VED will vary according to the carbon dioxide ( CO2 ) emissions of the vehicle.

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