UK Car Tax Bands & VED Costs Explained (2026 Guide)
How much is car tax in 2026? A clear breakdown of UK VED bands, electric car tax, the £40k luxury supplement, and how to check what you'll pay.
UK car tax — officially Vehicle Excise Duty (VED) — is one of the more confusing bills drivers face. The amount you pay depends almost entirely on when your car was first registered, not how old you bought it. This guide breaks down the three tax systems running in parallel in 2026.
The three VED systems in 2026
Depending on registration date, your car sits in one of three systems:
- Registered on or after 1 April 2017 — flat-rate system with a first-year “showroom tax”
- Registered 1 March 2001 to 31 March 2017 — CO2 emissions bands (A–M)
- Registered before 1 March 2001 — engine size only (two flat rates)
Cars registered from April 2017 onwards
This is the system most modern cars fall under. There are two steps:
Year 1: the “showroom tax”
The first year’s VED is based on CO2 emissions and is built into the on-the-road price. It ranges from £0 for zero-emission cars up to £2,745+ for the highest-polluting petrol/diesel cars. You only pay this once, in year one.
Year 2 onwards: the standard rate
From year two, almost every car pays the same flat rate, regardless of emissions. For 2026, the standard annual rate is approximately:
- Petrol & diesel: around £195/year
- Hybrid & alternative fuel: around £195/year (the old £10 discount was scrapped in April 2025)
- Electric (from April 2025 onwards): around £195/year
The £40,000 “luxury car” supplement
If your car had a list price over £40,000 when new — including options — you pay an additional supplement of around £410/year for years 2 through 6. That’s an extra ~£2,050 over five years.
This catches a lot of EV buyers off guard. A Tesla Model Y, BMW i4, or even some well-specced family SUVs cross the £40k threshold easily. From April 2025, EVs are no longer exempt from this supplement either.
Cars registered March 2001 to March 2017
These cars are taxed using 13 CO2 bands (A–M). The lower the emissions, the lower the bill. Approximate 2026 annual rates:
- Band A (up to 100 g/km CO2): around £20 (was £0 until April 2025)
- Band B (101–110): around £20
- Band C (111–120): around £35
- Band D (121–130): around £165
- Band E (131–140): around £195
- Band F (141–150): around £215
- Band G (151–165): around £265
- Band H (166–175): around £315
- Band I (176–185): around £345
- Band J (186–200): around £395
- Band K (201–225): around £430
- Band L (226–255): around £735
- Band M (over 255): around £760
If you’re thinking of buying a second-hand 2010 BMW M5, you’ll be paying Band M (£760/year) every year until you sell it.
Cars registered before March 2001
For older cars, VED is purely based on engine size. Two flat rates:
- Up to 1549cc: around £210/year
- Over 1549cc: around £345/year
Classic car tax exemption
Cars become tax-exempt 40 years after they were built on a rolling basis. In 2026, that means cars first registered before 1 January 1986can apply for the “Historic Vehicle” tax class. You still need to renew the tax every year — but it costs £0.
Historic vehicles are also MOT-exempt from the same 40-year date, provided the car hasn’t been substantially modified.
How to pay car tax
The DVLA has retired the paper tax disc — it’s all digital now. You can pay:
- Online at gov.uk/vehicle-tax (cheapest, instant)
- By phone: 0300 123 4321 (24-hour service)
- At a Post Office that handles vehicle tax
You can pay annually, every 6 months, or by monthly Direct Debit. Heads up: paying 6-monthly or monthly adds a 5% surcharge compared to paying yearly. On a £195 bill that’s an extra £10/year — small, but worth knowing.
What if I don’t use my car?
You must declare it SORN (Statutory Off Road Notification). SORN is free and lasts indefinitely. The car must then be kept off public roads — on a driveway, in a garage, or on private land. Driving a SORN car on a public road is a £2,500 fine plus court prosecution.
How to check your current tax status
Easiest way: enter your reg into MOTMate’s tax checker on the homepage. We pull live DVLA data showing whether you’re taxed, SORN, or untaxed (and from when). No login needed.
Or check directly at gov.uk/check-vehicle-tax — same source data, same answer.
VED at a glance — quick decisions
- Buying new in 2026? Expect ~£195/year standard rate from year two, plus £410/year supplement if list price exceeds £40k.
- Buying used (post-2017)? Same as above — first-year “showroom tax” was already paid by the original buyer.
- Buying used (2001–2017)? Check the CO2 band before you buy — could be £20 or £760/year.
- Going electric? Don’t assume £0 tax — that ended April 2025.
- Storing a car? SORN it. Free and avoids fines.
VED rates are reviewed every year in the Spring Budget, so figures here are based on the current 2025/26 rates and indicative 2026/27 expectations. Always confirm exact amounts on gov.uk before paying.
Frequently asked questions
How much is car tax in 2026?
For cars registered from April 2017, the standard rate from year two is around £195/year regardless of fuel type — including EVs and hybrids. Cars registered 2001–2017 pay by CO2 band, from around £20 (Band A) to £760 (Band M). Pre-2001 cars pay by engine size: roughly £210 under 1549cc or £345 over.
Do electric cars pay road tax now?
Yes. Until April 2025 EVs paid £0 VED, but from April 2025 they pay the same standard rate as petrol and diesel cars from year two — around £195/year. EVs also lost their exemption from the £40,000 'luxury car' supplement, so a Tesla Model Y or BMW i4 can attract an extra ~£410/year in years two to six.
What is the £40,000 luxury car supplement?
If your car's list price was over £40,000 when new — including options — you pay an additional supplement of around £410/year for years two through six, on top of the standard rate. That's roughly £2,050 extra over five years, and it catches many EV and well-specced SUV buyers off guard because it's based on the original list price, not what you paid.
When does a car become tax-exempt as a classic?
Cars become eligible for the 'Historic Vehicle' tax class 40 years after they were built, on a rolling basis — in 2026 that covers cars first registered before 1 January 1986. You still renew the tax every year, but it costs £0. Historic vehicles are also MOT-exempt from the same 40-year point, provided they haven't been substantially modified.