For example, electric cars and other zero emissions vehicles have long been exempt from road tax, although this changes as of April β more on that later. After that point, the only vehicles able to escape the dreaded yearly charge are classic cars aged over 40 years old so those sold before January , as well as vehicles used by disabled people or cars used to transport disabled passengers.
The amount of car tax you pay will be based partly on the amount of emissions produced by the car. However, as cars have become cleaner and more efficient, the government has made a series of changes to the car tax bands to prevent a shortfall in the amount of car tax revenue collected.
Revenue has remained on an upward trajectory since the s, increasing rapidly in recent years, but the emissions-based system is likely to see revenue fall in the long term as more people transition to EVs. The cash was only ringfenced until , thereafter going into the central pot to be spent on whatever the Government and Treasury desires.
Read on for a more detailed explanation of VED car tax bands, how much road tax is, and how to payβ¦. How much you pay for your VED road tax all depends on which tax system applies to your car and that is determined by when the car was first registered.
With the exception of inflationary increases, changes to the road tax system are not retrospectively applied, so the system that was in place when a new car was first purchased will continue to apply for as long as that car is on the road.
