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Car Tax: Understand the Bands

Car Tax: Understand the Bands

Last week we took a look at some frequently asked questions surrounding car tax, or VED. This week, we take a closer look at the different bands – and what that might mean for you. For the purposes of tax, cars are placed into tax bands depending on the type of fuel, engine size, age, and carbon dioxide emissions produced by the vehicle.

The system was changed in March 2020, and there are three sets of bands: one for vehicles that were registered prior to 1st March 2001, one for those between 1st March 2001 and 1st April 2017, and one for those registered post 1st April 2017.

For cars registered before 1st March 2001

The VED system is simplest for cars that were registered before 2001. Provided it is under 3,500kg revenue weight, a vehicle is classified as a PLG (private/light goods) vehicle. If the engine is 1549cc or under, the tax is £180 for a year or £99 for six months; for vehicles with an engine size over 1549cc, the cost for 12 months is £295, and £162.25 for six months.

For cars registered between March 2001 and April 2017

Cars produced in this time period are placed into 13 bands, A-M, depending on the CO2 emissions. Cars with emissions below 100g/km pay nothing, whilst cars with emissions over 255g/km pay £630 a year. Hybrids and cars that run on biofuel, LPG or CNG pay £10 less than the standard rate per annum. The first big leap comes for band D cars with emissions between 121 and 130g/km, who pay £135 a year as opposed to £30 for the band C cars, with emissions of 111-120g, and £20 for band B.

For cars registered after 1st April 2017

The reduction to £10 or £20 a year tax for millions of low-emission vehicles has made a significant dent in the income made from VED. As a result, as of 2017, there is a slight change in the calculations. There are still 12 categories, but only vehicles with zero emissions are completely exempt. What’s more, vehicles will pay more or less in the first year following production, depending on their emissions, with low emissions paying significantly less in the first year than subsequent years, and high emissions paying significantly more. Following the first year, all vehicles other than those that are exempt, or with zero emissions, will pay the same flat rate, which is currently set at £165 a year. Cars valued at over £40,000 will pay an extra £310 per year.

The easiest way to pay your car tax is online. If you fail to pay it, you will receive a reminder which is accompanied by a late licensing penalty fine of £80, reduced to £40 if paid in 33 days. Failure to pay the fine and the tax will lead to progression of enforcement, which could see your vehicle being clamped, and a hefty fine.

If you are buying a car and you are unsure of the ongoing tax implications, ask your local dealer – and make sure that you factor costs into the sale price. Was this helpful? For more advice, follow Trust A Garage on Facebook or Twitter.


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