Chancellor Rachel Reeves has confirmed updated vehicle tax rates, affecting drivers of cars registered before 2017. Unlike newer vehicles subject to a flat £200 annual fee, older cars are taxed based on their CO2 emissions levels, which can result in significantly higher or lower payments.
Tax Bands for Older Vehicles
Vehicles registered before 2017 fall into tax bands ranging from A to M, depending on emissions. Band A is as low as £20 per year, while Band M reaches a hefty £790. Many cars fall into bands E or F, with Band E matching the newer car rate at £200 and Band F slightly higher at £225.
Andy Wood, tax expert at Tax Barrister UK, explained: "A lot of drivers still assume road tax is calculated purely on the age of the vehicle, but emissions remain one of the biggest factors. Even modest differences in CO2 output can place vehicles into entirely different tax bands, impacting annual running costs."
Changes for Low-Emission Vehicles
New rules also mean vehicles emitting under 100 g/km of CO2 no longer qualify for free road tax. Owners now pay at least £20 annually. Electric vehicle drivers are also now required to pay vehicle tax.
Wood added: "The removal of the zero-rate band for cars emitting under 100g/km has caught some drivers off guard because many had become used to paying nothing. While £20 may not sound substantial, it reflects a wider shift towards bringing more vehicles into the VED system regardless of emissions."
