Vehicle Excise Duty in the UK - VED
All cars, motorcycles and light commercial vans are subject to a vehicle road tax (Vehicle Excise Duty-VED or sometimes called Road Fund Licence). There are thirteen bands in total and all are based on the CO2 emissions output of your petrol (TC48) and diesel (TC49) car.
Alternative fuel cars (TC59) are subject to a different rating system and further information on these can be can be found at the Direct.gov website
From April 2010 a stand-alone first year VED tax rate has been introduced and is known as the "first year rates". From the second year onwards the standard rate of vehicle tax will apply. The purpose of this is to encourage motorists to opt for greener cars.
There is one Vehicle Tax rate for Euro 4 light commercial goods vehicles, not over 3.5 tonnes (TC39), registered on or after March 2001 (£200 per annum or £110.00 six months).
However these amounts reduce (£125 per annum or £68.75 six months) if the van has Euro 4 or (TC36) Euro 5 engine rating (TC36).
Vehicle Excise Duty is usually included in your contract hire leasing rental however do check this with each contract hire company.
Choosing your next vehicle by CO2 is now even more important so try the Vehicle Type leasing quote engine and select body types by CO2 bandings.
The Vehicle Excise Duty bands and rates from May 2010 are as follows.
- The rates below only apply to cars that have been approved in category M1 and registered on the basis of CO2 emissions measured in grams per kilometre (g/km) driven.
- They apply to Petrol cars (TC48) and diesel cars (TC49)
- These details are shown on the V5 Registration certificate.
- Small changes in CO2 g/km output will now have a bigger effect on the Vehicle Excise Duty that is levied and the contract hire leasing company will factor this into their rental calculations.
- Choosing a less polluting vehicle will help the environment and should save you money, by paying less for your contract hire leasing rental.
| Band | CO2 (g/km) |
2010 12 month Standard Rate |
| A | Up to 100 |
Not applicable |
| B | 101-110 | £20.00 |
| C | 111-120 | £30.00 |
| D | 121-130 | £90.00 |
| E | 131-140 | £110.00 |
| F | 141-150 | £125.00 |
| G | 151-165 | £155.00 |
| H | 166-175 | £180.00 |
| I | 176-185 | £200.00 |
| J | 186-200 | £235.00 |
| K* | 201-225 | £245.00 |
| L | 226-255 | £425.00 |
| M | Over 255 | £435.00 |
*Band K includes cars that have a CO2 figure over 225g/km but were registered before 23rd March 2006.
| Band | CO2 (g/km) |
2010 12 month First Year Rate |
| A | Up to 100 |
Not applicable |
| B | 101-110 | Not applicable |
| C | 111-120 | Not applicable |
| D | 121-130 | Not applicable |
| E | 131-140 | £110.00 |
| F | 141-150 | £125.00 |
| G | 151-165 | £155.00 |
| H | 166-175 | £250.00 |
| I | 176-185 | £300.00 |
| J | 186-200 | £425.00 |
| K | 201-225 | £550.00 |
| L | 226-255 | £750.00 |
| M | Over 255 | £950.00 |
Compare Contract hire Ltd cannot be held responsible in any way concerning the accuracy of the above information.
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Vehicle Excise Duty Explained
Vehicle excise duty is usually included in your contract hire leasing rental.
New Vehicle Excise Duty rates for cars and vans based on the CO2 g/km output have come into effect from April 2010.
It is vital you look at the CO2 output of your vehicle if you are looking at your next car or van as this will save you money. Choosing your next car or van is easy by using the CO2 shopper where you can look at vehicles sorted by CO2 output and contract hire leasing rentals too.