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Vehicle Excise Duty (VED)

Vehicle excise duty (VED), also known as car tax or road tax, is an annual tax that a vehicle owner pays to the government so that the vehicle can be used and parked on public roads.

VED Rates

All newly registered vehicles pay a first-year VED rate, which is based on CO2 emissions.

From the second year onward, they charge transitions to the standard rate.

Cars priced over £40,000 incur a £425 luxury car tax in addition to the standard rate.

Costs usually increase every April. The cost of the first-year VED is included in the price of a new Lexus.

2025-26 VED Rates

  •     CO2 emissions (g/km)       First year VED       Standard VED*   
    0g/km £10 £195
    1 - 50 £110 £195
    51 - 75 £130 £195
    76 - 90 £270 £195
    91 - 100 £350 £195
    101 - 110 £390 £195
    111 - 130 £440 £195
    131 - 150 £540 £195
    151 - 170 £1,360 £195
    171 - 190 £2,190 £195
    191 - 225 £3,300 £195
    226 - 255 £4,680 £195
    Over 255 £5,490 £195

Key Figures

  • Standard rate applied after the 1st Year on all vehicles.

    £195

  • Additional charge on vehicles costing more than £40,000. This is only applicable in the second to sixth year since the first registration.

    £425

*Vehicles with a list price exceeding £40,000 when new are subject to an additional annual charge of £425 on top of the standard rate.

This extra charge applies for five years, beginning in the second year after the vehicle is first registered.