Labour MPs Provide Detailed Update on 2026 Vehicle Excise Duty Calculations
Labour Party representatives have issued a comprehensive clarification regarding how Vehicle Excise Duty (VED), commonly referred to as road tax, will be calculated for drivers starting in April 2026. This update comes in response to parliamentary inquiries about the basis for planned tax increases.
Emissions-Based Calculation Confirmed for 2026 VED Increases
Neil Duncan-Jordan, Labour MP for Poole, formally questioned the Chancellor of the Exchequer in the House of Commons about whether the scheduled VED increase would utilize factory emissions data from when vehicles were new or annual MOT results. Dan Tomlinson, Labour MP for Chipping Barnet, provided the definitive response that VED rates are determined by multiple factors including CO2 emissions, date of first registration, and vehicle weight.
The government has confirmed that from April 1, 2026, VED rates for all vehicle categories will be adjusted in accordance with the Retail Price Index (RPI) for the 2026-27 period. This adjustment represents a significant policy shift that will particularly impact owners of high-emission vehicles.
Substantial Tax Increases for High-Emission Vehicles
From April 2026, UK road tax rates will escalate dramatically for the most polluting vehicles. The first-year registration fee for vehicles emitting over 255g/km of CO2 will surge to £5,690. This increase affects 59 specific car models, including popular luxury and performance vehicles such as the Audi RS6, Range Rover Sport, and Ford Mustang.
For comparison, first-year rates for average petrol cars emitting approximately 143g/km of CO2 will be set at £560. Diesel vehicles, which typically emit around 164g/km, will face a substantially higher first-year charge of £1,360. The standard annual rate for existing vehicles will also increase to £200 across the board.
Electric Vehicle Considerations and Future Implications
While electric vehicles present a potential alternative for drivers seeking to minimize VED costs, it is important to note that even these zero-emission vehicles began paying a nominal tax share from 2025 onward. The Labour clarification emphasizes that vehicle tax calculations will continue to prioritize environmental considerations through emissions-based assessments.
This policy development represents a significant step in the UK's ongoing efforts to incentivize cleaner transportation options while generating revenue from the most environmentally damaging vehicles on British roads. The detailed parliamentary exchange provides motorists with crucial advance notice to prepare for these substantial financial changes coming in 2026.
