Drivers of petrol and diesel vehicles are being alerted to new car tax bands that have come into effect in 2026. Vehicle Excise Duty (VED) rates increase annually in April, based on Retail Price Index (RPI) inflation. This year, owners of combustion-engine cars are facing significant hikes, with some bills rising by up to £200 and exceeding £5,500.
Standard VED Charges for Cars Registered After 2017
All cars registered after April 2017 are subject to a standard VED charge, regardless of fuel type. From April 1, 2026, this flat rate increased from £195 to £200 per year, affecting petrol, diesel, and electric vehicles alike. This change coincides with new 15p per mile charges for electric company cars.
Expensive Car Supplement
The Expensive Car Supplement, applied to vehicles with a list price above £40,000 (or £50,000 for electric cars), has jumped to £440 annually. This additional fee targets higher-value cars.
First-Year Tax Rates for New Cars
New cars registered in 2026 face different first-year tax rates, with higher charges for more polluting models. The most polluting vehicles, emitting over 255g/km of CO2, are hit hardest, with first-year bills rising by £200 to £5,690. Slightly cleaner cars emitting between 226 and 255g/km of CO2 face charges of £4,850 per year.
Impact on Cars Registered Between 2001 and 2017
Vehicles registered between March 2001 and 2017 are placed into one of 13 tax bands based on emissions. The highest emitters (over 255g/km CO2) now pay £790 annually, while those emitting 226–255g/km pay £760 per year.
Older Cars (Registered Before 2001 and After 1986)
Cars registered before March 2001 but after 1986 are taxed based on engine size. Models with engines above 1549cc now cost £375 per year (a £15 increase), while those with engines of 1549cc or below pay £230 (a £10 rise).
Historic Vehicle Exemption
Cars registered before 1986 are completely exempt from VED under historic tax exemption rules, which provide a 100% discount for vehicles over 40 years old.
