If you are planning to get behind the wheel of a new car in 2026, or even if you’re sticking with your current motor, your wallet is about to feel the impact of the latest Vehicle Excise Duty (VED) updates. Announced by the Treasury, these changes aim to balance the books while nudging more British drivers toward a greener future.
From price hikes on petrol and diesel models to a major shift for electric vehicle (EV) owners, here is the breakdown of what you will be paying from 1 April 2026.
The Standard Rate: A £5 Increase
For the vast majority of drivers owning a car registered after April 2017, the annual “Standard Rate” is going up. Whether you drive a modest hatchback or a family SUV, the yearly bill will rise from £195 to £200. While it is a relatively small jump, it marks the continued trend of incremental rises in line with inflation.
The “First-Year” Hit for Petrol and Diesel
The government is tightening the screws on high-emission vehicles. If you buy a brand-new internal combustion engine (ICE) car in 2026, the “First-Year Rate”—the tax paid when the car is first registered—is seeing a significant spike:
- High-Pollution Vehicles: Cars emitting over 255g/km of CO2 will see their first-year tax rise from £5,490 to £5,690.
- The Aim: This “polluter pays” principle is designed to make petrol and diesel cars less attractive compared to their hybrid or electric counterparts.
Electric Vehicles: The Big 2026 Shift
The “honeymoon period” for electric vehicles officially ends in 2026. For the first time, EV owners will be integrated into the standard tax system, but there is some good news hidden in the small print:
- Standard Rate: Most EVs will now pay the same £200 annual rate as petrol cars.
- The £50,000 Threshold: In a win for the EV industry, the “Expensive Car Supplement” threshold for electric cars has been raised from £40,000 to £50,000. This means if your electric car costs less than £50k, you avoid the extra £410 annual surcharge that luxury petrol cars must pay.
- Older EVs: Electric cars registered before 2017 will move to a lower rate of just £20 per year.
UK Car Tax Rates 2026: At a Glance
| Category | 2025 Rate | New 2026 Rate (From April) |
| Standard Rate (Post-2017 cars) | £195 | £200 |
| New ICE Cars (Highest Emissions) | £5,490 | £5,690 |
| Electric Cars (Standard Rate) | £0 (Exempt) | £200 |
| Expensive Car Limit (EVs) | £40,000 | £50,000 |
| Pre-2001 Cars (Under 1549cc) | £220 | £230 |
Who Still Qualifies for an Exemption?
Despite the rising costs, certain groups remain protected from these increases:
- Historic Vehicles: Cars over 40 years old remain in the “classic” bracket and are exempt from VED.
- Drivers with Disabilities: Statutory exemptions remain in place for those receiving specific disability benefits.
- SORN: If your vehicle is kept off the road and you have filed a Statutory Off-Road Notification, you do not need to pay.
Summary
The 2026 changes signal a clear message from the UK government: the transition to electric is no longer optional, it’s becoming the financial baseline. While EV owners will start paying their share, the increased “Luxury Tax” threshold offers a significant buffer for those looking at premium electric models.
Top Tip: Always check your car’s CO2 emissions on your V5C logbook to see exactly which band you fall into before the April deadline.
