Since 2005 car tax has been based on CO2 emissions for cars registered before March 2010, or engine size for cars registered before March 2001. To further encourage the use of low-carbon models, in 2010, a CO2-dependent ‘first year’ rate was also introduced for all new cars during the first year of ownership.
For cars registered since 1st March 2001, car tax is now based on one of thirteen CO2 bands, listed from A to M – A being the lowest, and M being the highest. If you are looking to save a bit of money on car tax, then you will be best off looking for a car with a lower CO2 band.
Tax band A applies to cars with CO2 emissions of up to and including 100 g/km. Bands B to L apply to CO2 emissions of 101 to 255 g/km, with each band covering a 10-30 g/km range. The highest band M applies to cars with emissions of over 255 g/km.
A ‘first-year’ tax rate applies to new cars during the first year of ownership with a standard rate payable from the second year onwards.
Cars in tax bands A to D are zero-rated in their first year. Cars in bands E to G pay the same first year rate as the standard rate. New cars in bands H to M pay a higher first year rate, up to a maximum of £1065.
As well as battery electric cars being exempt from paying car tax, some alternatively fuelled cars (including hybrids and LPG cars) are also given a small £10 discount on both first year and standard rates.
For cars registered before March 2001, CO2 emission data is generally less available. As a result, car tax is charged according to engine size as measured in cubic centimeters or ‘cc’.
Current rates for cars in this category are £135 for engines up to 1549cc and £220 for engines of 1550cc or larger.
For more information about low-tax vehicles please visit next greencar.