VED car tax explained for Company Cars

Vehicle Excise Duty (VED) is a tax you pay when registering any new car and in every year it is used.

VED is split into 13 car tax bands based on CO₂ emissions and fuel type, ranging from £0 for some low emission cars to £2,175 for company cars emitting the highest level of emissions.

In subsequent years, there is a standard rate of:

• £150 for all petrol and diesel cars
• £140 for alternative fuel cars
• Electric cars are currently exempt

Company cars with a list price above £40,000, including any options fitted, must pay a premium of £325 for the first five years of standard rate payments. Zero-emissions cars are exempt from this premium. Hybrid models are classified as alternative fuel.

First-year VED rates: