From 1 April 2026, Vehicle Excise Duty (VED) rates are rising across the board. The standard rate goes up to £200. High-emission new cars face first-year bills of up to £5,690. And electric vehicles — tax-free until last year — now pay the same £200 annual rate as everyone else. Here's exactly what's changing and how it affects your car.
The Headlines
For most existing car owners, the change is modest — an extra £5 a year. But if you're buying a new car, switching to an EV, or driving anything with high emissions, the picture is more complicated.
First-Year Rates: The Full Table
When you register a new car from April 2026, you'll pay a first-year VED rate based on its CO2 emissions. The rates have been significantly steepened to incentivise cleaner vehicles:
After the first year, all cars drop to the standard annual rate of £200 — regardless of emissions. But that first-year bill can be a serious shock if you're buying a larger petrol or diesel car.
Diesel Drivers Take Note
Diesel cars typically produce higher CO2 per kilometre than their petrol equivalents due to greater weight. A diesel SUV that sits in the 151–170g/km band will face a £1,360 first-year bill — compared to a petrol equivalent that might fall in the 131–150g/km band at £540. The gap is significant and worth checking before you buy.
What Changes for Existing Cars?
If you already own a car registered after April 2017, your annual VED rises from £195 to £200 — a £5 increase. That's the standard flat rate that applies from year two onwards regardless of your car's emissions.
Cars registered before April 2017 remain on the old banding system based on CO2 emissions. These rates are also rising slightly with RPI inflation, but the structure stays the same.
The End of Free Road Tax for EVs
This is the change that's generating the most debate. Electric vehicles were completely exempt from VED until April 2025. Now, from their second year of ownership, EVs pay the full standard rate of £200 per year — the same as any petrol or diesel car.
The first-year rate for EVs remains low at just £10, but the days of completely free motoring taxes are over. For EV owners who bought partly on the promise of zero road tax, this feels like a broken deal.
EV Running Costs Still Lower
Despite now paying road tax, EVs remain significantly cheaper to run overall. No fuel duty, lower electricity costs per mile, and reduced maintenance expenses still make them the more affordable option for many drivers. See our full EV vs petrol running cost comparison for the latest numbers.
The Expensive Car Supplement
If your car had a list price over £40,000 when new, you pay an additional £425 per year on top of the standard rate for five years (years 2 to 6 of ownership). That means affected cars pay £625 per year instead of £200.
There's one notable exception: for zero-emission vehicles, the threshold rises to £50,000. So if your EV cost under £50,000 new, you avoid the supplement entirely. This is one of the remaining financial incentives for choosing an electric car — but it still only benefits those buying at the higher end of the market.
What's Coming Next: Pay-Per-Mile
The government has signalled that the long-term future of motoring taxation is pay-per-mile road pricing. As fuel duty revenue declines with the shift to EVs, a usage-based system is being developed to replace it.
A pilot scheme for electric vehicles is expected from April 2028, with proposed rates of 3p per mile for fully electric cars and 1.5p per mile for plug-in hybrids. For an average driver covering 7,400 miles per year, that would work out at around £222 — broadly similar to the current VED rate, but with heavier users paying more and lighter users paying less.
The Direction of Travel
The pattern is clear: the government is steadily closing the tax gap between EVs and combustion cars. Road tax, fuel duty increases from September 2026, and future pay-per-mile charging all point toward a world where every driver pays for road use regardless of what powers their car.
The True Cost of Owning a Car in 2026
Road tax is just one piece of the puzzle. Here's how the total cost of car ownership is stacking up this year:
- Road tax (VED): £200–£625 per year depending on your car
- Fuel: £1,500–£2,500 per year at current prices for an average driver — with duty increases coming from September
- Insurance: Up 25% since 2023, averaging £600–£900 per year — see our guide to cutting insurance costs
- MOT and servicing: £300–£600 per year depending on age and mileage
- Depreciation: The biggest hidden cost, typically £2,000–£4,000 per year for a car under five years old
For the average UK driver, the total annual cost of car ownership sits between £5,000 and £8,000. Every saving matters — which is why choosing where you fill up can make a real difference to your overall costs.
What You Should Do Before April
- Check your car's CO2 rating — If you're planning to buy a new car, check which first-year VED band it falls into before committing. The DVLA website shows exact rates for every model.
- Consider timing — If you're buying a high-emission car, registering before 1 April could save you money if the current first-year rate is lower than the new one.
- Factor in running costs — A cheaper car with higher emissions could end up costing more over three years than a slightly pricier, cleaner alternative when you factor in VED, fuel, and clean air zone charges.
- Control what you can — You can't change VED rates, but you can control your fuel costs. Use Fuelwise to compare prices and save up to £200+ a year by choosing the cheapest station in your area.
Quick Check
Not sure what you'll pay? Check your V5C logbook for your car's CO2 emissions figure, or search your registration on the GOV.UK vehicle tax checker. For cars registered after April 2017, you'll pay the standard £200 rate from April 2026 regardless of emissions.