How VED works for cars registered since 2017
Vehicle Excise Duty, usually called car tax or road tax, is charged annually on cars used or kept on public roads. For cars first registered on or after 1 April 2017, there are two stages. The first licence uses a rate based on CO2 emissions. Every later licence uses a flat standard rate, with an extra supplement for expensive cars.
The rates are published on gov.uk's vehicle tax rate tables and change each April. The figures here are the 2026/27 rates, checked in October 2026. Cars registered before April 2017 are on a different system based on engine size or emissions band, and are not covered here.
You can check any car's likely bill with the car tax calculator.
First-year rates by CO2 band
The first-year rate is paid once, when a car is first registered, and is set by official CO2 emissions in grams per kilometre. It is the biggest single VED charge a car will incur, and for higher-emission cars it can run to thousands of pounds. Cars registered in earlier tax years paid the rates in force at the time, which were lower.
The table shows 2026/27 rates. Petrol cars, diesels meeting the RDE2 real driving emissions standard and alternative fuel cars use the first column. Diesel cars that do not meet RDE2 move up a band and use the second column.
| CO2 (g/km) | Petrol, RDE2 diesel, alternative fuel | Diesel not meeting RDE2 |
|---|---|---|
| 0 | £10 | £10 |
| 1 to 50 | £115 | £135 |
| 51 to 75 | £135 | £280 |
| 76 to 90 | £280 | £365 |
| 91 to 100 | £365 | £405 |
| 101 to 110 | £405 | £455 |
| 111 to 130 | £455 | £560 |
| 131 to 150 | £560 | £1,410 |
| 151 to 170 | £1,410 | £2,270 |
| 171 to 190 | £2,270 | £3,420 |
| 191 to 225 | £3,420 | £4,850 |
| 226 to 255 | £4,850 | £5,690 |
| Over 255 | £5,690 | £5,690 |
The standard rate and the expensive car supplement
Cars with a list price over a set threshold pay an additional £440 a year in 2026/27 on top of the standard rate. The supplement applies for five years, starting when the car is taxed for the second time, so it covers years 2 to 6. A £200 standard rate becomes £640 a year, an extra £2,200 across the five years.
The threshold is £40,000 for petrol, diesel and hybrid cars. For zero emission cars it is £50,000. Gov.uk's rate table lists £50,000 for electric cars, and gov.uk confirms this higher threshold applies to electric cars registered from 1 April 2025 onwards. Electric cars registered before 1 April 2025 do not pay the supplement at all.
The list price is the figure at first registration and includes options fitted by the manufacturer. Because it is based on that price, a car can cross the threshold through optional extras. The supplement ends after the sixth licence and the car drops back to the standard rate.
From the second licence onward, cars registered since April 2017 pay the same standard rate regardless of fuel or emissions. In 2026/27 that is £200 a year. Paying in 12 monthly instalments instead of annually may cost more, so check the options when you tax the car.
For most drivers this is the figure that matters over the life of the car, because the high first-year charge applies only once. A buyer of a used car pays the standard rate from the day they tax it, no matter how big the first-year rate was.
Electric cars and VED
Zero emission cars were exempt from VED until 31 March 2025. Since 1 April 2025 they have paid VED: a first-year rate of £10, then the standard rate of £200 from the second licence. Electric cars registered before 1 April 2025 are generally on the zero rate and do not pay the expensive car supplement.
This means an electric car with a list price between £40,000 and £50,000 can avoid the supplement that a similarly priced petrol car would pay, under the higher threshold for newer registrations. The effect on the total cost over a three or four year lease is easy to quantify with the true cost of leasing tool.
Plug-in hybrids and mild hybrids are treated as petrol or diesel for VED unless they are zero emission, so they use the CO2 table above. A plug-in hybrid at 1 to 50g/km pays £115 in the first year and £200 after that, with the supplement if the list price is over £40,000. This is a common surprise for drivers who assume a plug-in badge means the lowest charge.
Worked comparisons
Take a petrol car at 140g/km with a list price of £45,000 registered in 2026/27. The first-year rate is £560. In years 2 to 6 it pays £200 plus £440, a total of £640 a year, so five later licences cost £3,200. Over the first six years that is £3,760 in VED.
An electric car at £45,000 pays a £10 first-year rate, then £200 a year, assuming the higher £50,000 threshold applies to it. Over six years that is £1,010. The gap is £2,750, before the cost of fuel or electricity is counted.
These are illustrative sums based on the 2026/27 rates. Rates change annually, so later years may differ.
The first-year rate, standard rate and supplement combine in different ways depending on the car. The table totals six years of VED, covering one first-year payment and five standard payments, using 2026/27 rates and assuming the supplement applies to every car above its threshold.
The differences are mostly driven by list price rather than fuel type once the first year is passed. A £60,000 electric car pays more over six years than a £35,000 petrol car, because it is charged the supplement and the petrol car is not.
| Example car | First year | Years 2 to 6 (each) | Six-year total |
|---|---|---|---|
| Petrol, 100g/km, £28,000 | £365 | £200 | £1,365 |
| Petrol, 170g/km, £30,000 | £1,410 | £200 | £2,410 |
| Petrol, 140g/km, £45,000 | £560 | £640 | £3,760 |
| Electric, £35,000 | £10 | £200 | £1,010 |
| Electric, £45,000 (higher threshold) | £10 | £200 | £1,010 |
| Electric, £60,000 | £10 | £640 | £3,210 |
Finding the figures for a car and common misunderstandings
The CO2 figure is on the V5C registration certificate and on the manufacturer's specification sheet. It is the official WLTP figure for that variant, so check the exact trim and engine, because two versions of the same model can fall into different bands.
The list price for the supplement is the price at first registration, not what the buyer paid. If a car is close to the £40,000 or £50,000 line, check the price on the V5C or ask the seller or lessor, because optional extras can tip it over.
A frequent mistake is assuming the first-year rate is charged every year. It is a one-off, and from the second licence the standard rate takes over. Another is assuming that electric cars are exempt, which stopped being true on 1 April 2025.
A third is mixing up VED with company car tax. They are separate taxes: VED is paid by the keeper of the car on the vehicle, while company car tax is paid by an employee on the benefit of using an employer's car. You can compare the two in our company car tax calculator.
Selling or buying used cars brings its own questions. Vehicle tax no longer transfers with the car: the seller cancels it and any refund goes to them, and the new keeper must tax the car before driving it.
- Check the CO2 figure for the exact variant, not just the model name.
- Confirm whether a diesel meets RDE2, as non-compliant diesels pay the higher column.
- Confirm the registration date, which decides the rate table and the threshold that apply.
- Add the expensive car supplement for years 2 to 6 if the list price is above the line.
- Ask whether VED is included in the rental if the car is leased.
Who pays VED on a lease
The leasing company is the registered keeper and legally responsible for taxing the car. On a personal or business contract hire, VED is usually built into the monthly rental, so you do not pay it separately. Some contracts exclude it, which is why the line in the paperwork matters.
Read the schedule of what the rental includes. If VED is included, the first-year charge is part of what the lessor costs into the lease. If you are comparing a lease with buying, remember that an owner pays the first-year rate in the purchase price and the standard rate after. Our lease vs PCP vs HP vs buying tool lets you compare the totals.
Before signing, ask four things: whether first-year and annual VED are both included, whether the lessor will tax the car for the whole term, whether any increase in VED during the lease can be passed on to you, and whether the expensive car supplement has been priced in for a car above the threshold. Rates are set by the Government each year, so the answer to the third question can matter on a longer agreement.
If you are the registered keeper, for example when buying outright or on hire purchase, you are responsible for taxing the car yourself. Tax runs from the day it is renewed, a car cannot legally be driven on the road untaxed, and a car kept off the road needs a Statutory Off Road Notification. That is one reason many drivers prefer leasing, where the paperwork sits with the lessor.