Older motorists across the United Kingdom are set to be impacted by a confirmed increase in car tax rates, with new Vehicle Excise Duty (VED) charges scheduled to take effect from April 2026. The changes will see the majority of petrol, diesel, and electric vehicle owners facing higher annual bills, as the government implements inflation-linked adjustments.
Standard Rates Rising for Most Drivers
According to the newly confirmed regulations, standard VED rates for vehicles registered after 2017 will increase from £195 to £200 per year. This represents a consistent annual rise tied to the Retail Price Index (RPI), ensuring that vehicle taxation keeps pace with broader economic inflation measures.
Elderly drivers will find themselves paying identical charges to all other motorists, as the UK's vehicle taxation system offers no age-related concessions or discounts for pensioners. This policy means that fit and healthy older drivers must meet the same financial obligations as younger road users.
Exemptions and Special Cases
While most drivers face increased charges, certain vehicle categories remain exempt from VED obligations. Disabled motorists continue to be excluded from road usage fees under the existing system, providing important financial relief for those with mobility challenges.
Additionally, owners of vintage automobiles registered over forty years ago will maintain their exemption from yearly VED payments, preserving the classic car community's traditional benefits.
Significant Increases for New Vehicle Purchases
The most substantial impact will be felt by purchasers of brand-new petrol and diesel cars, who will see first-year VED charges rise by £200. The rate will increase from £5,490 to £5,690, representing a significant upfront cost for those investing in new internal combustion engine vehicles.
Older models registered before 1 March 2001 will also experience fee increases, with larger vehicles exceeding 1549cc seeing their annual charges rise from £360 to £375. Smaller vehicles with engines under 1549cc will face increases from £220 to £230 annually.
Electric Vehicle Advantages
Electric vehicle drivers represent one of the few groups that will experience minimal impact from the 2026 tax adjustments. Established EVs registered before 2017 will continue paying just £20 annually for road usage, while first-year VED expenses for zero-emission cars will remain at £10 per year.
This preferential treatment reflects the government's ongoing commitment to encouraging electric vehicle adoption and supporting the transition to cleaner transportation options.
Policy Background and Implementation
HM Revenue and Customs (HMRC) announced the VED rate increases toward the end of last year, following the publication of Rachel Reeves' Autumn Budget. The changes were formally confirmed through legislation introduced in Finance Bill 2025-26, which specifically uprates Vehicle Excise Duty rates for cars, vans, and motorcycles in line with RPI for the 2026 to 2027 financial year.
Officials stated that the adjustments will take effect from 1 April 2026, giving motorists several months to prepare for the increased financial obligations. The regular annual increases ensure that vehicle taxation maintains its real value over time, contributing to government revenue while accounting for inflationary pressures.
The confirmed changes highlight the ongoing financial considerations facing UK motorists, particularly older drivers who must budget for increased transportation costs alongside other living expenses. With the April implementation date approaching, vehicle owners are advised to review their financial planning to accommodate the higher VED charges.
