Older Car Tax Hike: Pre-2001 Vehicles Face £15 Annual Increase
Owners of older vehicles registered before March 2001 are set to encounter a significant car tax increase in 2026, as announced by the Labour Party government. This adjustment specifically targets cars with larger engines, imposing higher annual fees on road users who own these particular models.
New Tax Bands for Older Vehicles
Under the revised tax structure, older cars registered prior to March 2001 that feature engines larger than 1549cc will now be required to pay £375 per year. This represents a £15 rise from the current annual charge of £360. For owners of petrol and diesel cars with engines below 1549cc, the new rate will be £230 annually, marking a £10 increase from the existing £220 fee.
These increments mirror the hikes implemented last year, where fees escalated from £345 to £360 for larger engines and from £210 to £220 for smaller ones. The consistent pattern suggests a gradual upward trend in taxation for older vehicles.
Expert Commentary on the Changes
Motoring expert Paul Cowland provided insight into the impact of these changes, stating, “Pre-2001, big cars are up to £375. That’s not the end of the world, but if you are running something that’s a bit meaty and a bit lumpy, it will cost a little bit more than it did last year. Hopefully, it’s not a deal breaker for you.” His remarks highlight that while the increase is noticeable, it may not be prohibitive for most drivers.
Broader Context of Vehicle Excise Duty
Road tax, officially known as Vehicle Excise Duty (VED), typically costs £195 per year for the majority of drivers. However, vehicles with a list price exceeding £40,000 are subject to the Expensive Car Supplement, which adds £425 annually to the VED, resulting in a total of £620 per year.
Since April 2025, electric car drivers have also been mandated to pay car tax. For electric vehicles registered before 2017, the VED can be as low as £20 per year. The RAC advises that most electric vehicle owners pay the standard £195 annual road tax, but new electric cars registered after April 1st, 2025, with a list price over £40,000, will incur the Expensive Car Supplement for the first five years of the standard rate.
Currently set at £425 per year, this supplement means owners of 'expensive' electric cars will pay a total of £620 annually for road tax, aligning with the charges for high-value conventional vehicles.
