Drivers who own or are thinking of buying a car built after 2001 are being urged to check their vehicle's emissions rating, as new tax rates introduced by Prime Minister Andy Burnham take their toll on household budgets. Under the updated vehicle excise duty system, families can face annual bills from £20 for the cleanest models up to a peak of £790 for the heaviest polluters, with the most common Band F charge now set at £225.
The reforms, which came into force earlier this year, mark one of the first major motoring policies from the Burnham administration. They are intended to accelerate the shift toward low-emission vehicles, but they have also delivered an unexpected financial hit for drivers who previously paid nothing at all.
How the new tax bands work
Vehicle tax is no longer based simply on a car's age. Every vehicle is now assigned to one of 13 tax bands, labelled A through M, according to its official CO2 emissions. The vast majority of cars on UK roads, especially those registered between 2001 and 2017, fall into the middle bands E, F, G and H.
That means most motorists are directly affected by the rate changes. A typical family hatchback in Band F, for example, now costs £225 a year to keep on the road. That is a sizeable chunk of money, particularly for those who already use their cars daily for commuting and school runs.
At the opposite end of the scale are the most efficient vehicles — those that emit less than 100g/km of CO2. These were previously eligible for a zero-rate band, meaning their owners paid no road tax at all. Under the new rules, they face a £20 annual charge. While that is far below the £225 of Band F, it still represents a new cost for drivers who had grown accustomed to paying nothing.
High-emission luxury cars, sports cars and large SUVs can be taxed as much as £790 per year. That is a £565 difference compared to a Band F vehicle, and a staggering £770 more than the cheapest low-emission cars.
Emissions still dominate the cost
Andy Wood, a tax expert at Tax Barrister UK, says too many drivers remain caught out by the emissions-based system. He explained that the difference of just a few grams of CO2 per kilometre can shift a car into a far more expensive tax band, with big implications for the annual bill.
“A lot of drivers still assume road tax is calculated purely on the age of the vehicle, but emissions remain one of the biggest factors in determining how much motorists pay,” Mr Wood said. “Even relatively modest differences in CO2 output can place vehicles into entirely different tax bands, which can have a noticeable impact on annual running costs.”
The removal of the zero-rate band has also been singled out as a cause of confusion. Mr Wood added: “The removal of the zero-rate band for cars emitting under 100g/km has caught some drivers off guard because many had become used to paying nothing at all.”
Check your car before it costs you
Given the significant variation in tax charges — from £20 to £790 — it is vital that drivers understand where their vehicle sits in the new system. The quickest way to find out is to check your vehicle's V5C logbook, which lists its emissions figure and current tax band, or to use the government's online vehicle enquiry service.
For anyone planning to buy a used car from the 2001–2017 era, the same check should be done before any money changes hands. A car with a low purchase price might look like a bargain, but a high CO2 figure could mean a £790 tax bill every year, completely undermining the savings.
Impact on households
The new charges arrive at a time when many Birmingham households are already wrestling with rising living costs. For a family that owns a mid-sized petrol car, the £225 Band F bill is an unavoidable annual expense that needs to be factored into the household budget.
Even the £20 charge for low-emission cars, while relatively modest, has been described as a sting in the tail for drivers who previously enjoyed free road tax. The changes are part of a wider government strategy to cut carbon emissions and boost electric vehicle take-up, but they also signal that the days of cheap road tax are over.
As the new rates are already in place, there is no escaping them. But being aware of how the system works can at least spare drivers from any nasty surprises. Checking your car's tax band now, before you renew, is the best way to ensure you are not paying more than you need to — or at least to know exactly what to expect.
