Car tax, formally known as Vehicle Excise Duty, is a tax on motorists. For vehicles registered before March 2001, it has been raised by £5 to £170/year for private vehicles (light vans, cars, taxis etc.) from September 2005. A reduced rate is payable for cars with a smaller engine size. Vehicles with an engine smaller than 1549cc benefit from a £55 reduction in VED, paying only £110/year.
The tax payable on vehicles registered after March 1, 2001 is based on a six-band scale linked to carbon dioxide emission.
The DVLA's Rates of Vehicle Excise Duty shows the range of rates payable. The Vehicle Certification Agency has a calculator that will allow you to work out which band your vehicle falls into.