 | | | The new car tax rules explainedThe price of an annual car tax disc is now based on how much carbon dioxide (CO2) a car emits and what fuel it uses. The old system of car road tax, which was based only on engine size, was changed to encourage drivers out of gas-guzzling, high-emissions older cars and into newer, smaller-engined ones.
Fueling debate
The Government hopes that the CO2-based system will encourage the purchase of more fuel-efficient vehicles and those emitting less carbon dioxide (CO2 output is proportionate to the amount of fuel burned), and also to get drivers to use more environmentally-friendly fuels.
How is it worked out?
There are six CO2 grades. No new cars on sale currently meet the criteria for the lowest Band A (emitting up to 100g/km) bar special-order electric models, but a number of small city cars, and larger hybrids such as the Honda Civic IMA and Prius, qualify for Band B (101-120g/km). Inside these six bands, there are additional penalties or incentives based on the type of fuel used: alternative fuels get a part-rebate, while diesel fuels are penalised for their increased particulate emissions.
Breakdown of rates :
| Bands |
CO2 rating
(g/km) |
Diesel
12 month |
Petrol
12 month |
Alternative fuel
12 month |
| Band A |
Up to 100 |
£75 |
£65 |
£55 |
| Band B |
101-120 |
£85 |
£75 |
£65 |
| Band C |
121-150 |
£115 |
£105 |
£95 |
| Band D |
151-165 |
£135 |
£125 |
£115 |
| Band E |
166-185 |
£160 |
£150 |
£140 |
| Band F |
Over 185 |
£170 |
£165 |
£160 |
Older cars
If your car was registered before 1st March 2001, then the Vehicle Excise Duty you have to pay is based on your engine size: £110 for 12 months on vehicles up to 1549cc and £165 for those over 1549cc
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