Drivers of the most polluting vehicles are set for a significant financial hit, with a £200 increase in Vehicle Excise Duty (VED) coming into force under new tax bands for 2026.
Details of the 2026 VED Changes
From next year, vehicles emitting more than 255 grams of CO2 per kilometre (g/km) will face a hefty new charge of £5,690. This represents a £200 rise from the current rate. The adjustment forms part of the government's ongoing revision of vehicle tax bands, which are primarily based on a car's official CO2 emissions when first registered.
Who Must Pay Road Tax and Key Exemptions
Motoring expert Pete Barden has clarified the rules around VED payments. While most vehicles are liable, several important exemptions exist. Your vehicle could be exempt from paying road tax if it falls into one of the following categories:
Firstly, brand new cars that produce zero tailpipe CO2 emissions and have a list price under £40,000 are not required to pay.
Secondly, a historic vehicle tax exemption applies to cars more than 40 years old. If your vehicle was registered before 1 January 1983, it is likely to be tax-free. The DVLA advises owners to confirm their vehicle's status, noting that if the exact build date is unknown but the car was first registered before 8 January 1983, you can still apply to stop paying vehicle tax.
How Vehicle Tax is Calculated and Paid
Motorists can check the precise tax rate for new, unregistered cars using the official government website. You will need details of the car's fuel type, CO2 emissions, and list price.
Tax is payable when a vehicle is first registered, covering it for an initial 12-month period. Subsequently, vehicle tax is paid every 6 or 12 months at a standard rate, which is different from the first-year rate.
The initial payment is calculated directly from the vehicle's CO2 emissions. Importantly, diesel cars that do not meet the Real Driving Emissions 2 (RDE2) standard for nitrogen oxide emissions are subject to a higher rate. Car owners can check with their vehicle's manufacturer to confirm if it meets the RDE2 standard.
An additional annual cost applies to owners of expensive cars. If you have a car or motorhome with a list price exceeding £40,000, you must pay an extra £425 per year for five years, starting from the second time the vehicle is taxed.
