What is VED in the UK and how much does this motoring tax cost?

Though the Chancellor’s spring budget announcements didn’t penalise motorists any further, we aren’t half put through the ringer when it comes to emptying our wallets for driving pleasure. Vehicle excise duty (VED), more commonly known as road tax, is applied to all cars new or old, but since the rules have changed over the years, not all road tax is billed equally.

To make life a bit simpler, these days road tax is a standard £165 per year for all cars, except electric vehicles (EVs). Anyone thinking of making the switch to the green stuff to make cost savings need to get going. From 2025, electric cars will need to pay the standard rate, just like all other cars since 2017.

If you’re on the hunt for a bargain in the used car market, getting a motor produced between 2001 and 2017 could bring greater savings. Back then, the CO2 emissions of the vehicle dedicated how much tax a driver paid. Anything with less than 100g/km was zero pounds and many of those motors from around 2015 comply with ULEZ regs too.

Going classic, i.e., more than 40 years old, saves you money too, since these cars are exempt.

FIVE OF THE INTERNET’S MOST PERTINENT QUESTIONS ABOUT UK ROAD TAX

How much is road tax in the UK?

Depends on the age of your vehicle. If it’s six years or younger (April 2017-), then you’re paying £165 per year. If it pre-dates the April 2017 changes, then it still depends. Check your CO2 emissions and compare against it on the government website here.

How does road tax work in the UK?

Road tax in the UK is a mandatory requirement for all cars on the road, unless they qualify for an exemption.

Which cars are exempt from road tax?

Classic cars older than 40 years don’t require any VED payment and until 2025, electric vehicles are road-tax-free, too. There’s also a smattering of models that, as explained above, fell within the maximum emissions requirements between 2001 and 2017, which also don’t have to pay road tax.

Is classic car tax exemption automatic?

Nope. As with everything in the pre-digital world, you need to register the vehicle for automatic exemption and even then, you’ll still get reminder emails, demanding £0.00 unless you complete an online form.

Is VED the same as road tax?

Yep. As explained, vehicle excise duty is road tax. Introduced in 1920, it was syphoned off to a specific ‘Road Fund’ and ringfenced for road construction. However, because the money was never fully utilised, Churchill came along in 1926 as Chancellor of the Exchequer and redirected a third of the pot to be used for other purposes in the Treasury. The Road Fund itself ceased to exist in 1936 and from thereon in, the roads have never been in better shape.