This is how much road tax has increased for car owners in 2021

Wednesday, 7th April 2021, 3:56 pm
Updated Monday, 12th April 2021, 2:00 pm
Road tax has increased for millions (Shutterstock)
Road tax has increased for millions (Shutterstock)

Road tax changes came into force on this month with car users required to pay a higher amount of Vehicle Excise Duty (VED).

The increase in VED will see drivers pay between £5 and £70 a year more on road tax.

The increase is typically calculated in line with inflation using RPI (Retail Price Index).

How is road tax decided if your car was registered on or after April 1, 2017?  

If your car was registered on or after 1 April 2017 you need to pay tax when the vehicle is first registered, this covers the vehicle for 12 months.

You’ll then pay vehicle tax every 6 or 12 months at a different rate.

For the first tax payment you pay a rate based on a vehicle’s CO2 emissions the first time it’s registered.

A second tax payment is paid from then on with the fuel type of your car deciding how much you are required to pay.

Cars with a list price of more than £40,000 are required to pay an additional expensive car VED of £335.

How is road tax decided if your car was registered between March 1, 2001 and March 31, 2017?  

If your car was registered between these two dates the rate of vehicle tax is based on fuel type and CO2 emissions. CO2 emission details are shown on the car’s V5C registration certificate.

How has road tax changed in 2021?

From April 1 2021 only electric cars are exempt from paying VED with the first-year rate of car tax based on C02 emissions.

The standard rate of VED increased this month from £150 to £155.

James Andrews, finance expert at comparison site Money.co.uk, explained to the Mirror how some drivers may be impacted by the tax increase.

He said: "People with petrol and diesel cars will see vehicle excise duty rise to £155 a year, while the tax on premium cars – i.e. those costing more than £40,000 new – now pay an eye-watering £335 a year for the first five years of ownership.

"First year rates are also increasing, with cars that produce between 76g/km and 170g/km of carbon dioxide will seeing their bills rise by £5, people with cars in the 171g/km to 190g/km will see a £25 rise; there’s a £30 rise for people with cars producing 191g/km to 225g/km, £40 for 226g/km to 255g/km vehicles and a whopping £70 increase for everything above that."

Owners of cars registered on or after April 1, 2017 can find out how much they’re required to pay here.

Owners of cars registered between March 1, 2001 and March 31, 2017 can find out how much they’re required to pay here.