Motorists in the UK are facing higher Vehicle Excise Duty (VED) charges in 2026, with some drivers now paying up to £445 a year to use the roads. The increase follows changes that came into effect on April 1, 2026, overseen by former Chancellor Rachel Reeves, which raised bills for almost all road users.
How VED rates have changed
VED rates are calculated based on the date a car was registered and its overall emissions. Standard rates for cars registered after 2017 increased from £195 to £200 per year. However, the larger change affected vehicles first built between 2001 and 2017, which are placed into one of 13 tax bands depending on their CO2 emissions.
The most polluting models, in Band M for cars emitting over 255g/km of CO2, pay the most at £790 per year. Cars emitting between 226 and 255g/km of CO2 now pay £760 annually. Lower-emission models in Band K, for cars emitting between 201 and 225g/km of CO2, have seen prices rise to £445—a £15 increase from the previous rate of £430 before April 1.
Impact on drivers
Motorists were paying just £415 per year over the 2024/25 tax year, meaning overall fees have jumped £30 over the past year and a half. The RAC previously explained that VED rates for cars first registered after March 2001 and before April 2017 are split across 13 bands depending on CO2 emissions, with lower emissions resulting in a lower tax band.
VED rates are typically tied to annual Retail Price Index (RPI) inflation, meaning motorists are likely to face another set of charges from April 1, 2027, though exact details have yet to be announced. New Chancellor John Healey is expected to confirm any price rises around his Autumn Budget later this October.
Motorists can pay their annual VED fees in one go or spread the costs throughout the year. Fees can be collected every six months, but road users are likely to pay more due to a 5% surcharge.
