UK motorists face car tax increases of up to £35 from April 2027, with the highest-emitting older vehicles set to cost £825 a year under newly confirmed Vehicle Excise Duty (VED) bands.
The Treasury has confirmed that VED prices will rise following the Autumn Budget statement, with the new fees taking effect from April next year. Because the tax increases every 12 months in line with Retail Price Index (RPI) inflation, the rise was expected.
The price hikes will affect almost every petrol, diesel and electric car owner across Britain, with a sliding scale of charges applying.
Standard VED charge to rise
The standard VED charge for all vehicles registered after 2017 is predicted to jump from £200 a year to £210, a £10 increase, according to motoring specialists at Pete Barden.
Owners of older vehicles registered between 2001 and 2017 are among the most affected by the updates. These drivers are placed into one of 13 tax bands depending on their vehicle emissions.
Highest-emitting vehicles face biggest rise
Band M vehicles, which emit over 255g/km of CO2, will pay the most, with bills expected to rise from £790 to £825 next year, a £35 increase.
Cars in the next band down are also impacted. Vehicles emitting between 226 and 255g/km are placed into Band L and are set to pay £795 per year from April 2027, a £35 increase on the current £760 charge.
This is a slightly higher increase than last year, when overall fees rose from £735 to £760 per year. Drivers in this tax band paid just £710 to use the roads between 2024/25, with costs as low as £675 over 2023/24.
The Treasury previously said: "The government will uprate VED rates for cars, vans and motorcycles in line with the Retail Prices Index (RPI) from 1 April 2027."
