Vehicle Excise Duty (VED), commonly known as road tax, is a key cost for UK drivers. However, the amount you pay varies significantly between the first year of owning a new car and subsequent years. With important changes coming into effect in 2025, understanding the difference between first-year and standard tax rates is essential for budgeting and making informed vehicle choices. This article explains these differences, how CO₂ emissions influence rates, and how you can use the CarVeto car tax calculator to estimate your costs accurately.
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Introduction
Road tax is not a flat fee-it depends on your vehicle's registration date, CO₂ emissions, fuel type, and value. New cars attract a higher first-year rate based on emissions, designed to encourage cleaner vehicles. From the second year onwards, a standard rate applies regardless of emissions, with some exceptions for expensive cars. In 2025, first-year rates are set to increase significantly, affecting many new car buyers. Let's explore how these tax rates differ and impact your total cost.
What Are First-Year and Standard Tax Rates?
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First-Year Tax Rate: This is a higher Vehicle Excise Duty (VED) charge applied only during the first 12 months after a new car is registered. It varies based on the vehicle's CO₂ emissions, with higher polluting cars paying more.
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Standard Tax Rate: From the second year onwards, most cars pay a flat standard rate, currently £195 per year for petrol, diesel, hybrid, and electric vehicles registered after April 2017. Expensive cars (list price over £40,000) pay an additional supplement for five years.
How Do First-Year Rates Work?
First-year rates are designed to reflect the environmental impact of your vehicle:
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Cars with lower CO₂ emissions pay little or no first-year tax. For example, zero-emission vehicles (electric cars) currently pay £0 but will pay £10 from April 2025.
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Cars with higher emissions pay significantly more, with rates rising steeply as emissions increase.
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From April 2025, first-year road tax rates will double for vehicles emitting 76g/km CO₂ or more, making high-emission cars much more expensive to tax initially.
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Even low emission cars will see increases; for example, vehicles emitting 1-50g/km CO₂ will see first-year tax rise from £10 to £110.
2025 First-Year Tax Rate Examples
| CO₂ Emissions (g/km) | First-Year Tax 2024 | First-Year Tax 2025 | Increase % |
|---|---|---|---|
| 0 | £0 | £10 | ∞ |
| 1-50 | £10 | £110 | 1000% |
| 51-75 | £30 | £130 | 333% |
| 76-90 | £135 | £270 | 100% |
| 91-100 | £175 | £350 | 100% |
| 101+ | £195+ | £390+ | 100% |
How Do Standard Tax Rates Work?
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After the first year, most vehicles pay a standard flat rate regardless of emissions: currently £195 per year for petrol, diesel, hybrid, and electric cars registered since April 2017.
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Vehicles with a list price over £40,000 pay an additional expensive car supplement of £390 per year for five years after the first year.
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This standard rate simplifies tax payments for used cars and older vehicles, encouraging long-term ownership.
How Do These Rates Affect Your Total Road Tax Cost?
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Higher first-year rates mean new car buyers face a bigger upfront tax cost, especially for higher emission vehicles.
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Over time, the standard rate reduces the annual tax burden, making ownership more affordable after year one.
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The expensive car supplement can significantly increase total tax for luxury vehicles.
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Electric vehicles, previously exempt from first-year tax, will now pay a small amount (£10) initially but benefit from the standard rate thereafter.
How to Calculate Your Road Tax Using CarVeto Car Tax Calculator
The CarVeto car tax calculator is a handy tool to estimate your road tax based on your vehicle's registration date, CO₂ emissions, and value. Here's how to use it:
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Enter your vehicle registration number or details.
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Input your car's CO₂ emissions (found on your V5C or online).
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Check the first-year tax if your car is new or the standard rate for older vehicles.
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Include any expensive car supplement if your vehicle's list price exceeds £40,000.
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View your estimated annual road tax cost and payment options.
Using this calculator helps you budget accurately and compare vehicles before buying.
Key Takeaways
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First-year tax rates are higher and based on CO₂ emissions, designed to encourage cleaner cars.
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Standard tax rates apply from the second year and are mostly flat, simplifying ongoing costs.
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2025 sees significant increases in first-year rates, especially for higher emission vehicles.
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Expensive cars pay an additional supplement after the first year.
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The CarVeto car tax calculator helps you estimate your exact tax liability quickly and easily.
Frequently Asked Questions (FAQs)
Q1: Why are first-year road tax rates higher than standard rates?To incentivize buying low-emission vehicles and penalize high-polluting cars, encouraging greener choices.
Q2: Will electric vehicles pay road tax in 2025?Yes, from April 2025, electric vehicles will pay a £10 first-year tax and £195 standard rate thereafter.
Q3: How long does the expensive car supplement apply?For five years after the first year of registration.
Q4: Can I pay road tax monthly?Yes, monthly payments are available via direct debit, usually with a small surcharge.
Q5: How can I check my exact road tax amount?Use the CarVeto car tax calculator by entering your vehicle details for a precise estimate.
Conclusion
Understanding the difference between first-year and standard road tax rates is vital for UK drivers, especially with the 2025 changes increasing first-year charges significantly. While first-year rates reflect your vehicle's environmental impact, the standard rate simplifies ongoing costs. Using the CarVeto car tax calculator makes it easy to estimate your total road tax liability and plan your budget accordingly. Whether you're buying a new car or managing an existing one, knowing these rates helps you make smarter, cost-effective decisions.