Major Car Tax Hike Sees 59 Luxury Models Pay £5,690 Annually
Motorists across the United Kingdom are facing significantly higher vehicle taxation bills this month as new Vehicle Excise Duty (VED) rates take effect. Starting April 1, 2026, the top rate of car tax has risen to £5,690 annually, impacting dozens of high-performance and luxury vehicles from prominent manufacturers.
Chancellor Reeves Implements Substantial VED Increases
Chancellor Rachel Reeves has overseen substantial increases to vehicle taxation that particularly affect petrol, diesel, and hybrid cars registered after 2017. The standard tax rate for these vehicles has now risen to £200 annually, while electric cars under one year old also face a flat £200 rate. For those paying in monthly instalments over twelve months, the total cost increases to £210.
The most dramatic change affects 59 specific models from 24 manufacturers that will now be subject to the maximum £5,690 levy. This represents a continuation of major VED reforms initiated last year, which saw certain vehicles experience a £2,745 increase in their first-year taxation.
Luxury Car Supplement and Emission Standards
Vehicles with an original list price exceeding £40,000 when first sold (or £50,000 for electric vehicles) face an additional Expensive Car Supplement of £425 annually for five years. This "luxury car tax" adds £2,125 over the six-year period for qualifying vehicles.
Diesel cars that fail to meet the Real Driving Emissions 2 (RDE2) standard for nitrogen oxide emissions face particularly high rates. Motorists can check their vehicle's compliance by consulting the manufacturer directly.
The exact taxation amount depends on multiple factors including the vehicle's registration year, fuel type, and CO2 emissions. For vehicles producing over 255g/km of CO2, the £5,690 rate applies immediately upon registration.
Affected Vehicle Models
The comprehensive list of vehicles now subject to the £5,690 tax includes numerous high-performance and luxury models:
- Lamborghini Urus 4.0 V8 BiTurbo
- BMW X6 M 4.4 V8
- Land Rover Defender 110 5.0 P425 V8
- Ferrari Purosangue 6.5 V12
- Rolls-Royce Ghost 6.75 V12
- Mercedes-Benz G63
- Porsche 718 Cayman 4.0 GT4
- Audi R8 5.2 FSI V10
- Toyota Land Cruiser 2.8D
- Ford Ranger 3.0 EcoBlue
- Aston Martin DBX 4.0 V8
- Range Rover 4.4 P615 V8
- Jaguar F-Pace 5.0 P575 V8
- Toyota Hilux 2.8D
- INEOS Grenadier 3.0P
- Ford Mustang 5.0 V8
- Lotus Emira 3.5 V6
- Bentley Bentayga 4.0 V8
- BMW Alpina XB7 4.4 V8
- Aston Martin DB12 4.0 V8
- Volkswagen Amarok 3.0 TDI
- Ferrari Roma 3.8T V8
- Chevrolet Corvette Stingray 6.2 V8
- Maserati MC20 3.0 V6
- Bentley Flying Spur 4.0 V8
- BMW X5 M 4.4 V8
- Porsche 911 3.7T 992 Turbo
- Bentley Continental 6.0 W12
- Range Rover Sport 4.4P V8
- McLaren GT 4.0T V8
This represents just a portion of the affected vehicles, with additional models from manufacturers including Alfa Romeo, Jeep, and Maserati also facing the maximum tax rate.
Historical Vehicles and Future Changes
Vehicles manufactured over forty years ago continue to be classified as "historic vehicles" and remain exempt from VED payments. Similarly, road tax exemptions for disabled drivers remain unchanged despite the broader increases.
Looking ahead, electric vehicle owners face additional taxation changes. Starting in April 2028, a new "mileage levy" will be introduced for electric vehicles at a rate equivalent to 3p per mile for battery electric vehicles and £0.015p per mile for plug-in hybrids. This charge, designed to compensate for lost fuel duty revenue, is projected to add approximately £300 for every 10,000 miles driven and will increase annually with the Consumer Price Index.
The government has stated this revenue will help fund road maintenance, though no specific implementation system has yet been outlined for how drivers will pay this mileage-based charge.
Compliance Requirements and Penalties
Vehicle taxation remains compulsory for the majority of UK road users. Registered keepers of untaxed vehicles face an automatic £80 fine, reduced to £40 if paid within twenty-eight days. Failure to pay can result in referral to debt collection agencies.
For vehicles registered between March 2001 and March 2017, taxation bands based on CO2 emissions continue to apply, with rates ranging from £20 for the lowest emission vehicles to £790 for those producing over 255g/km of CO2.
The taxation changes represent the most significant adjustment to vehicle excise duty in recent years, particularly affecting high-emission luxury vehicles while maintaining certain exemptions and introducing new charges for electric vehicle users in the coming years.
