Andy Burnham is set to introduce a new £210 car tax charge next April, with new Vehicle Excise Duty (VED) updates confirmed following the Autumn Budget. The Treasury admitted that VED tax bands would increase from spring 2027, with experts at Pete Barden predicting how much fees are likely to rise.
Standard VED Rate to Rise to £210
VED rates rise in line with Retail Price Index (RPI) inflation every spring, with specialists predicting the standard VED rate will rise by £10. The standard VED fee covers all new cars registered after April 2017, with petrol, diesel and electric models all paying the charge.
This standard VED rate sits at £200 per annum, but Pete Barden has tipped this rise to £210 from April 1. The increase will be double the rise motorists enjoyed last year, when VED rates rose from £195 to £200 per year.
Treasury Confirms RPI Uprating
The Treasury revealed details of the VED increases in the Budget document that was released just hours after Chancellor John Healey's statement in the House of Commons. The Treasury report read: "The government will uprate VED rates for cars, vans and motorcycles in line with the Retail Prices Index (RPI) from 1 April 2027."
It's not the only update, with VED fees set to rise across the board, including luxury car tax fees for brand new cars.
Higher Charges for Polluting Vehicles
Pete Barden warns that the most polluting vehicles emitting over 255g/km of CO2 are tipped to pay £5,950 from April 2027, a staggering £290 increase on the current £5,690 fee.
Owners of brand new models emitting between 226 and 255g/km of CO2 will pay £5,070, a £220 increase on the current £4,850 charge. Vehicles emitting between 191 and 225g/km will pay £3,575 in year one from April 2027, another increase on the current £3,420 charge.
Other Budget Measures for Drivers
However, it wasn't all bad news for road users in the Budget, with Mr Healey confirming that planned fuel duty hikes would be scrapped. There were also updates to business mileage rates and an extension of the 0% VAT rate on domestic electricity supply.
Mr Healey added: "For millions of people the cost of living and the cost of doing business is the same. The home is the office and the van is the family car."
