Drivers across the United Kingdom are set to face increased motoring costs from April 2026, as new Vehicle Excise Duty (VED) bands come into effect. Experts at Pete Barden have detailed the forthcoming charges, revealing that most motorists will pay hundreds of pounds more to use the roads.
Standard Rate Increase and Budget Link
The standard annual VED rate will climb by £5, moving from £195 to £200 for the 2026-2027 period. This adjustment is directly tied to the Retail Price Index (RPI) update announced in the Labour Party government's 2025 Autumn Budget. While this represents a modest increase for many, drivers in higher emission brackets will experience substantially larger financial impacts.
VED Rates for Vehicles Registered 2001-2017
For vehicles registered between March 1, 2001, and April 1, 2017, the new tax bands show varied increases:
- Up to 120g/km: Rates remain unchanged at £20-£35
- 121-130g/km: Rising from £165 to £170
- 131-140g/km: Increasing from £195 to £200
- 141-150g/km: Climbing from £215 to £225
- 151-165g/km: Growing from £265 to £275
- 166-175g/km: Ascending from £315 to £325
- 176-185g/km: Moving from £345 to £360
- 186-200g/km: Rising from £395 to £410
- 201-225g/km: Increasing from £430 to £445
- 226-255g/km: Climbing from £735 to £760
- Over 255g/km: Jumping from £750 to £790
Post-2017 Registration System
The VED system underwent significant changes on April 1, 2017, when the CO2-based structure was replaced with three new road tax bands: zero, standard, and premium. This reform was implemented in response to falling CO2 emissions levels, which had resulted in many motorists paying minimal or no VED, costing the Treasury millions in lost revenue.
Cars first registered after April 2017 remain subject to the first-year 'showroom tax', calculated based on the vehicle's CO2 emissions. From the second year onward, the standard rate of £195 applies annually. Additionally, vehicles with a list price exceeding £40,000 (or £50,000 for electric cars) incur an extra £425 charge for the first five years of standard rate application.
Electric Vehicle Taxation Changes
April 2025 marked another pivotal change in the road tax system, with electric vehicles becoming subject to VED charges for the first time. New electric cars now face the standard VED rate, the expensive car supplement, and the first-year showroom tax applicable to vehicles with CO2 emissions between 1 and 50g/km.
Current Tax Bands for Post-2017 Vehicles
The existing structure for cars registered after April 2017 includes:
- 0g/km: £10 first year, £195 standard rate
- 1-50g/km: £110 first year, £195 standard rate
- 51-75g/km: £130 first year, £195 standard rate
- 76-90g/km: £270 first year, £195 standard rate
- 91-100g/km: £350 first year, £195 standard rate
- 101-110g/km: £390 first year, £195 standard rate
- 111-130g/km: £440 first year, £195 standard rate
- 131-150g/km: £540 first year, £195 standard rate
- 151-170g/km: £1360 first year, £195 standard rate
- 171-190g/km: £2190 first year, £195 standard rate
- 191-225g/km: £3300 first year, £195 standard rate
- 226-255g/km: £4680 first year, £195 standard rate
- Over 255g/km: £5490 first year, £195 standard rate
For vehicles registered before March 2001, taxation continues to be based on VED engine size categories rather than CO2 emissions, affecting owners of modern classics and older reliable vehicles.
