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 £2,365 for company cars emitting the highest level of emissions.
In subsequent years, there is a standard rate of:
- £165 for all petrol and diesel cars
- £155 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 £335 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:
CO₂ emissions (g/km) | First Year Rate |
0 | £0 |
1-50 | £10 |
51-75 | £25 |
76-90 | £120 |
91-100 | £150 |
101-110 | £170 |
111-130 | £190 |
131-150 | £230 |
151-170 | £585 |
171-190 | £945 |
191-225 | £1,420 |
226-255 | £2,015 |
Over 255 | £2,365 |
