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UK Car and Van 2022 Tax Bands

One of the main costs for motorists can be Vehicle Excise Duty (VED) otherwise known as “car tax”; this can set some back up to £1,000 per year, though this figure varies widely by type and age of vehicle as well as the specific tax “banding”.

Tax disc

Since 2018, changes in some of the laws mean costs may be higher than in previous years, not helping at a time when fuel costs plus private and motor trade insurance policy premiums have also been slowly rising. In this article we look at some of the VED guidelines and costs for 2022.

Car tax has been payable on any new car since 2001, for vehicles older than this, an annual cost of between 145 and 230 pounds per year is applied, with the cost dependent on engine size.

However, most vehicles used in the UK by private users, or the motor trade industry will have been manufactured and registered between 2001 and March 2017, these vehicles are assigned cost bandings based on carbon dioxide emission levels.

This cost is also affected for those with a higher list price and certain diesel vehicles. Costs rose again in April 2021, and currently owners of all vehicles except fully electric cars must pay their tax annually.

There are 13 bands (A-M), with prices rising to M, being the highest. This band is for those vehicles emitting over 225 g/km of CO2 and currently costs around £515 each year for the newest cars; cars registered before the end of March 2016 have a cap of £315 annually, even those which are sitting in the top band.

Those in the lowest band (A) with emissions under 10g/km are exempt. It is worth noting that new cars emitting under 130 g/km CO2 are exempt from car tax in their first year, with additional factors in the cost – for example hybrid, biofuel or LPG vehicles are charged at £10 less than petrol or diesel cars in the same band.

For all new cars registered after the start of April 2017, a new first year rate applies, between £10 for those emitting under 50 g/km and some £2,070 for the highest band. However, from year two onwards, all vehicles are charged at £140 annually, except fully electric cars.

In April 2018, further changes happened. Those with a list price of over £40,000 attract a significant premium of between £310 and £450 annually for the first five years of ownership, depending on the type of fuel. After that period, the rate reverts to between £0 and £140 depending on fuel.

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Diesel cars registered after the start of April 2018 attract other premiums. Those which don’t meet the Real Driving Emissions 2 (RDE2) standards are heavily taxed in year 1 (up to a maximum of £2,070) and then at a flat rate of £140 annually; if the car does meet the RDE2 standard, it falls under the usual banding levels for year 1 and then a flat rate of £140 thereafter.

One additional thing to bear in mind is that road tax is NOT transferred when you purchase a car second hand privately or from a motor trade dealer.

You will still need to tax the vehicle before driving it, even if the previous owner had recently taxed the same vehicle! The seller may be eligible for a refund, and if so, this will be calculated and paid automatically by the DVLA once the ownership has transferred.

This is yet another cost factor to consider when shopping around motor dealerships and insurance brokers for the best deal.

In summary, car tax can be an expensive addition to your usual motoring costs, it’s important to research what level of price you may be taking on, especially if you are considering a new car with a high list price or with high emission levels.