Car Tax

Car tax, formally known as Vehicle Excise Duty (VED), is a tax on motorists.

For vehicles registered before March 2001 it is £180 a year for private vehicles (light vans, cars, taxis, etc.). A reduced rate is payable for cars with a smaller engine size. Vehicles with an engine smaller than 1549cc pay only £115 a year.

The tax payable on vehicles registered after March 2001 is based on a seven-band scale linked to carbon dioxide emissions.

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.

In Budget 2007, all car VED rates for petrol were aligned up to the level for diesel. The graduated VED rate for band A (cars emitting less than 100g/km CO2) remains frozen at £0.

Last Updated: April 2008 © Moneyextra.com

MoneyExtra.com recommends you should consider taking independent financial advice before acting on any article. Please contact us for help with your individual circumstances if any assistance is required.