What is the standard annual rate of vehicle excise duty under section 1GD of the Vehicle Excise and Registration Act 1994?

Section 1GD sets a flat annual rate of £195 for vehicle excise duty on all vehicle licences other than the first licence issued for a qualifying vehicle. This rate applies regardless of the vehicle's CO2 emissions or other environmental characteristics and took effect for licences taken out on or after 1 April 2025.

When does the £195 standard rate for vehicle excise duty not apply?

The £195 standard rate does not apply where paragraph 1GE(2) applies instead, which covers certain specific vehicle types or circumstances. In those cases, a different rate overrides the standard £195 charge. Vehicle owners must check whether their vehicle falls into one of those excepted categories before applying this rate.

How does the first vehicle licence differ from subsequent licences under section 1GD?

The first vehicle licence is typically subject to a rate based on the vehicle's CO2 emissions, which may result in a higher or lower charge depending on environmental characteristics. From the second licence onwards, the flat standard annual rate of £195 applies regardless of emissions, simplifying the duty calculation for renewals.

When was the £195 vehicle excise duty rate introduced and by which legislation?

The £195 rate was substituted by section 66 of the Finance Act 2025 and applies to licences taken out on or after 1 April 2025. Earlier rates applied to licences taken out before that date. The Finance Act 2020 also simplified sub-paragraph (2) by removing a further cross-reference, narrowing exceptions to paragraph 1GE(2).

Vehicle Excise and Registration Act 1994 section 1GD

Standard annual rate for vehicle excise duty on subsequent licences

Section 1GD sets out the flat annual rate of vehicle excise duty that applies when a vehicle licence (other than the first licence) is taken out for a vehicle covered by this part of the schedule.

A standard annual rate of £195 applies to vehicle excise duty for any vehicle licence other than the first licence for a qualifying vehicle.
This flat rate is used to calculate the duty payable regardless of the vehicle's CO2 emissions or other environmental characteristics.
The £195 rate applies to licences taken out on or after 1 April 2025, having been updated by the Finance Act 2025.
The standard rate does not apply where the alternative rate under paragraph 1GE(2) applies instead, which covers certain specific vehicle categories.

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