UK Motorists Face Higher Vehicle Excise Duty Rates

The Government of the United Kingdom implemented increased Vehicle Excise Duty (VED) rates on April 1, 2026, raising costs for nearly all road users. The changes, overseen by former Chancellor Rachel Reeves, primarily impact owners of petrol and diesel vehicles through a tiered system based on registration dates and CO2 emissions.

For cars registered after 2017, the standard rate rose from £195 to £200 per annum. Vehicles registered between 2001 and 2017 are now split into 13 tax bands, with the highest-polluting models in Band M paying £790 per year. Even modern classics registered before 2001 saw increases, with vehicles above 1549cc now costing £375.

New vehicle owners face the steepest hikes. Brand-new cars emitting over 255g/km of CO2 now carry a first-year tax rate of £5,690, up from £5,490. These adjustments widen the cost gap between combustion engine owners and electric vehicle owners. Because VED rates are tied to Retail Price Index inflation, further increases are expected by April 1, 2027. Chancellor John Healey is expected to confirm potential price rises during the Autumn Budget in October 2026.