From 1 April 2026, the UK government will introduce a new set of Vehicle Excise Duty (VED) / road tax increases that will affect the vast majority of drivers — including petrol, diesel, hybrid and electric vehicle owners. These changes form part of the government’s ongoing emissions-linked taxation policy, and most motorists will see their annual tax bill go up in the 2026/27 tax year.
This article covers the confirmed VED changes, how the new system works, the exact rate increases where available, and practical tips for drivers and dealers preparing for April.
You can run a free Total Car Check to see any GB registered vehicle’s road tax status and costs at totalcarcheck.co.uk.
What Is Vehicle Excise Duty (VED)?
Vehicle Excise Duty (commonly known as road tax) is an annual tax paid to the UK government to keep a vehicle legally registered for use on public roads. The amount depends on factors including:
- When the vehicle was first registered
- CO₂ emissions
- Fuel type
- Original list price and whether it’s above a certain value
Since April 2017, most cars pay a standard flat rate after the first year, with an additional Expensive Car Supplement when applicable. See current rates that came into effect in 2025.
Confirmed VED Changes Effective 1 April 2026
Standard Annual Rate Rises
For cars registered on or after 1 April 2017, the standard annual VED rate will rise slightly:
- From £195 to £200 for most vehicles after the first year on the road.
This change reflects the Retail Price Index (RPI) uprating and applies to petrol, diesel and hybrid cars alike.
First-Year VED increases for New Cars
The first-year VED rate — sometimes known as the “showroom tax” — is based on a vehicle’s CO₂ emissions and remains substantially higher for higher-emission cars.
The maximum first-year rate has risen again for 2026, now reaching:
- £5,690 for cars emitting more than 255 g/km of CO₂.
This top band applies to an expanded group of models, including SUVs, sports cars and luxury vehicles from many mainstream manufacturers.
Other first-year bands vary depending on emission levels — from around £10 at the lowest end to thousands for high-emission models.
Electric Vehicle VED Changes
One of the most talked-about changes in 2026 relates to electric vehicles (EVs):
- Zero-emission cars that were previously exempt from annual VED after their first year will now pay the standard rate — typically around the same as petrol and diesel cars.
This reflects the government’s broader strategy to rebalance tax revenues as electric car adoption increases.
Expensive Car Supplement Threshold for EVs
An important policy tweak confirmed in the most recent budget increases the Expensive Car Supplement threshold for zero-emission vehicles from £40,000 to £50,000. This means that EVs with original list prices between £40,000 and £50,000 that take out a new licence on or after 1 April 2026 will not pay the expensive car supplement.
For non-EVs, the £40,000 threshold remains in place.
Historic and Exempt Vehicles
Certain vehicles remain exempt or subject to special rules:
- Historic vehicles (over 40 years old) can qualify for free road tax under DVLA historic vehicle classification.
- Disabled drivers and some other categories may also retain exemptions or reduced rates, depending on eligibility.
How Much You’ll Pay in 2026/27
Standard VED After Year One
| Vehicle type | Typical annual VED from April 2026 |
|---|---|
| Petrol/diesel/hybrid (after first year) | £200 |
| Electric cars (post-first year) | Standard rate (similar to petrol/diesel) |
| Historic vehicles (40+ years) | £0 (if appropriately classified) |
First-Year VED (New Cars)
| CO₂ Emission band | First-year VED for 2026 |
|---|---|
| Lowest emissions | ~£10+ depending on band |
| Average petrol/diesel (~143g/km) | ~£560+ |
| Highest emissions (>255g/km) | £5,690 |
Expensive Car Supplement
- Applies for the first five years after the first annual licence
- Threshold for EVs increased to £50,000 for licences effective from 1 April 2026
Why These Changes Matter
Rising Costs for Drivers
The combined effect of inflation-linked rises and emissions-linked taxation means:
- Everyday drivers will see a modest increase in annual road tax
- Buyers of new, higher-emission cars face significantly larger first-year bills
- Some vehicles — especially higher emission SUVs and performance cars — may incur hefty tax charges that exceed the car’s practical value in the used market.
Impact on Used Car Market
These tax changes are already influencing buyer behaviour:
- Older vehicles in high VED bands can attract disproportionately high annual tax relative to market value, affecting resale prices
- Some mid-2000s cars are being scrapped or heavily discounted because their annual road tax outweighs value.
How to Check Your Vehicle’s New VED Rate
To avoid surprises:
- Check your vehicle’s CO₂ emission figures and original list price — this determines your first-year and expensive car supplement obligations.
- Use the official GOV.UK vehicle tax checker with your registration number to see the exact rate applicable from your next renewal date.
- Consider whether a lower-emission vehicle might significantly reduce your ongoing ownership costs.
FAQs About the April 2026 VED increases
Do all cars pay the same new rates?
No. Your VED depends on when the car was first registered, its CO₂ emissions, fuel type, and original list price.
Will electric cars be taxed at the same rate as petrol cars?
Yes — after the first year, most EVs will pay the same standard rate as petrol/diesel cars from April 2026.
Does this affect company car tax or fuel duty?
These are separate issues, but the April changes coincide with broader motoring tax adjustments. Many company car benefit-in-kind (BiK) and fuel duty policies are also evolving.
Preparing for the April 2026 VED Rises
To make the most of your budgeting and vehicle planning:
- Renew your tax before 1 April if feasible to potentially lock in old rates
- Review your next car purchase with an understanding of its long-term VED impact
- Factor higher VED into pricing and valuations if you’re a dealer or fleet manager
Staying informed now can save money and help you avoid unexpected road tax bills after the changes take effect.