UK vehicle tax (VED) explained for 2025/26
Vehicle Excise Duty — road tax — is what you pay to keep a car on the road. For newer cars it has two parts: a one-off first-year rate based on CO2 emissions, then a flat standard rate. Pricey cars pay an extra supplement. Here's how it all fits together.
The showroom tax
In the first year, road tax is based on the car's CO2 emissions and can range from £10 for the cleanest cars to over £5,000 for the highest emitters. This "showroom tax" is usually bundled into the on-the-road price by the dealer.
From year two onwards
After the first year, almost all cars move to a flat standard rate of £195 a year (2025/26), regardless of emissions. The only ongoing variation is the expensive-car supplement.
The £40,000 supplement
If a car's list price was over £40,000 when new, you pay an extra £425 a year on top of the standard rate for five years — from year two to year six. After that it drops back to the standard rate. This is based on the original list price, not what you paid, so it can catch buyers of nearly-new cars.
EVs lost their exemption
A £28,000 petrol car at 120 g/km
A new petrol car emitting 120 g/km pays a first-year rate of around £440, then £195 a year from year two. As it's under £40,000 there's no supplement. Over six years that's roughly £440 + (£195 × 5) = £1,415 in road tax.
Common road tax mistakes
- Forgetting EVs now pay VED. The electric-car exemption ended in April 2025; budget for £195 a year.
- Ignoring the £40,000 supplement. It is based on the original list price and adds £425 a year for five years.
- Letting tax lapse. You must tax a car even when SORN ends; driving untaxed risks fines and clamping.
- Assuming low emissions mean cheap standard rate. After year one, nearly all cars pay the same £195 standard rate.