Chancellor Rachel Reeves has confirmed that drivers of older cars will face a £375 charge under new Vehicle Excise Duty (VED) bands introduced by the Labour Party government. Starting in 2026, vehicles registered between 1986 and 2001 will be subject to higher rates, with the top band reaching £375.
Details of the New VED Charges
Cars with engines over 1549cc are now required to pay £375 annually in VED fees. Paul Cowland, presenter of the television show Savage Hunters, commented: “Pre-2001, big cars are up to £375. That’s not the end of the world, but if you are running something that’s a bit meaty and a bit lumpy, it will cost a little bit more than it did last year. But hopefully, it’s not a deal breaker for you.”
Vehicles registered before 1 March 2001 are classified as Private/Light Goods (PLG) vehicles, which include private motor cars or goods vehicles with a revenue weight not exceeding 3,500kg.
How the System Works
The VED system for older cars is divided into two categories based on engine size: not over 1549cc and over 1549cc. For cars first registered after March 2001 and before April 2017, the rates are split across 13 bands depending on CO2 emissions. The RAC explains: “VED road tax rates for cars first registered after March 2001 and before April 2017 are split across 13 bands depending on the CO2 emissions of the vehicle. In basic terms, the lower the CO2, the lower the tax band.”
Since 2025 VED rule changes, cars with CO2 emissions below 100g/km no longer qualify for free road tax. Owners now pay £20 annually for VED if their car emits up to 100g/km of CO2. Road tax for petrol and diesel cars registered after March 2001 and before April 2017 remains broadly the same.
Renewal and Payment Information
Vehicle owners automatically receive a reminder before the tax expires, which always occurs at the end of a given month. For example, if a vehicle is taxed for 12 months from 1 January, renewal is required before the end of December. Motorists can tax a car for six or 12 months, and road tax is due immediately upon taking ownership of a vehicle.
However, buyers of efficient new vehicles may find costs lower than expected, and in some cases, they might pay nothing at all. The changes are part of broader efforts to update the VED system and encourage the use of cleaner vehicles.
