Road tax – how does it works and how much does it cost?

Commonly referred to as road tax, Vehicle Excise Duty (VED) is levied on every vehicle that uses a UK public road, and it’s collected by the Driver and Vehicle Licensing Agency (DVLA).

For the majority of cars registered before April 2017, VED is mainly measured according to official CO₂ emission figures. For vehicles registered after this date, payments are emission-related for the first year only. And for the second year, a £165 tariff applies to most drivers, irrespective of the CO₂ emission levels a car produces.

As things stand, electric vehicle (EV) owners aren’t required to pay VED; plug-in hybrid electric vehicle (PHEV) owners typically pay a maximum £25 for the first year of registration; and diesel cars that meet the RDE2 standard and petrol cars could pay up to £2,365.

The aforementioned PHEV and HEV payments are a guide only – there are several VED tax bands, which are based on the emissions that vehicles produce. Full details can be found here: https://www.gov.uk/vehicle-tax-rate-tables.

Here at Birchwood Motor Group, we stock a wide selection of low and zero-emission vehicles produced by Ford, KIA, and ŠKODA. If you’d like to know more or if you wish to book a test drive, please get in touch with your local branch today.