UK Car Tax Rates 2026/27: New VED Increases Explained | Honest John

Millions of motorists face a sting in the tail this week as the new financial year ushers in another round of car tax increases with some drivers now facing an annual bill of close to £800 a year. 

As of April 1 2026, Vehicle Excise Duty (VED) — commonly known as road tax — has risen across the board. While the Government describes the changes as an “inflation-linked adjustment,” the reality for many drivers is a noticeable jump in annual running costs.

From the standard rate hike to the first full year of EV taxation, here is everything you need to know about the 2026/27 VED changes.

For the majority of drivers with a petrol, diesel, or hybrid car registered after April 2017, the annual standard rate has officially climbed to £200.

This is up from £195 last year and £180 just two years ago. If you choose to pay in monthly instalments via Direct Debit, your total annual cost will now be £210.

Pre-2017 car rates

If your car was registered before April 2017, you are on a completely different tax system. Unlike the flat standard rate for newer cars, your bill is decided by either your CO2 emissions or your engine size.

For the 2026/27 tax year starting today, these rates have also been nudged upwards in line with inflation.

This group is split into 13 bands (A to M) based on CO2 emissions. The big change for 2026 is that the free tax band for low-emission cars (formerly £0) remains a thing of the past — even the cleanest cars now have a small annual charge.

Electric cars: The end of the free ride

The 2026/27 tax year marks the first full period where electric vehicles (EVs) are firmly embedded in the tax system.

Owners of electric cars registered between April 2017 and March 2025 must now pay the full £200 standard rate.

New EV owners registering a brand-new electric car today will pay a £10 first-year showroom tax, which then jumps to £200 from the second year onwards.

Even zero-emission cars registered between 2001 and 2017 are no longer exempt, moving into a new £20 annual bracket.

The £50,000 luxury threshold for EVs

There is one small win for electric car buyers. While petrol and diesel cars with a list price over £40,000 are hit with the Expensive Car Supplement (adding £440 to the bill for five years), the threshold for electric cars has been increased to £50,000.

If your EV cost more than £50,000, your total annual tax bill will be a hefty £640 (£200 standard rate + £440 supplement).

Vans and commercials

Small business owners aren’t escaped the hike either. The standard rate for most modern light goods vehicles (vans) registered after 2001 has risen to £360 per year.

Many more drivers will be paying more, with the standard rate of VED from the second year onwards increasing from £195 to £200.

The Expensive Car Supplement, for vehicles pried over £40k, also increases, from £425 to £440.

The Expensive Car Supplement is on top of the £200 standard rate and is paid for five years once a new car enters its second year.