Vehicle Excise Duty in the UK

All cars, motorcycles and light commercial vans are subject to a vehicle road tax (Vehicle Excise Duty or sometimes called Road Fund Licence).

There are thirteen bands in total and all are based on the CO2 emissions output of your car.

There is one Vehicle Tax rate for light commercial goods vehicles registered on or after March 2001 (£185 per annum or £101.75 six months) however these amounts reduce (£125 per annum or £68.75 six months) if the van has Euro 4 or 5 engine rating.

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.

The Vehicle Excise Duty bands and rates from May 2009 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 (TC 49)
  • 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 and the contract hire 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 rental.

 Band CO2 (g/km)
 2009-2010
Standard Rate
 A  Up to 100
  £0
 B 101-110  £35
 C 111-120  £35
 D 121-130  £120
 E 131-140  £120
 F 141-150  £125
 G 151-165  £150
 H 166-175  £175
 I 176-185  £75
 J 186-200  £215
 K* 201-225  £215
 L 226-255  £405
 M Over 255  £405

*Band K includes cars that have a CO2 figure over 225g/km but were registered before 23rd March 2006. All other rates of vehicle tax are frozen for 2009.

Compare Contract hire Ltd cannot be held responsible in any way concerning the accuracy of the above information.

Vehicle excise duty is usually included in your contract hire leasing rental.

The 2009 Budget has introduced new Vehicle Excise Duty rates for cars and vans based on the CO2 g/km output.

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.