Millions of motorists across the UK are set to face higher Vehicle Excise Duty charges from the start of the new financial year, as the government confirms a series of increases across thirteen distinct tax bands. The new rates, which will come into effect on April 1, 2026, will see some drivers of higher-emission vehicles paying up to £790 annually, marking a significant rise in motoring costs for many.
Springtime VED Increases Confirmed
The Labour Party government has officially announced that Vehicle Excise Duty rates will rise as part of the typical annual spring adjustments. This confirmation follows a pattern of incremental increases each year, but the 2026-2027 changes introduce notable hikes for several vehicle categories, particularly those with higher carbon dioxide emissions.
Rhydian Jones, a car insurance expert at Confused.com, commented on the impact of these changes, stating, "These increases will affect drivers across the country, so it's important to know what you will be expected to pay before your renewal date arrives." He further emphasised the broader context of rising motoring expenses, adding, "At a time when many other motoring costs are also set to rise this year, these new rates may come as unwelcome news for some drivers. The key thing is to make sure you understand how the new rates apply to your car so you can plan ahead."
Chancellor Outlines Future Tax Reforms
In a related statement, Labour Party Chancellor Rachel Reeves indicated broader intentions for motoring tax reform. She announced plans to exempt search and rescue vehicles from Vehicle Excise Duty, responding to calls from parliamentary colleagues. More significantly, Reeves outlined a future shift towards taxing drivers based on usage rather than vehicle type alone.
"And because all cars contribute to wear and tear on our roads, I will ensure that drivers are taxed according to how much they drive and not just by the type of car they own by introducing Electric Vehicle Excise Duty on electric cars," the Chancellor stated. This signals a potential long-term change in how motoring taxes are structured, moving towards a system that accounts for road usage.
Detailed Breakdown of New VED Rates for 2026-2027
The new Vehicle Excise Duty rates apply specifically to vehicles registered between March 1, 2001, and April 1, 2017. The following list details the thirteen tax bands and their corresponding charges for the upcoming financial year:
- Up to 100g/km - Remains at £20
- Between 101 and 110g/km - Remains at £20
- Between 111 and 120g/km - Remains at £35
- Between 121 and 130g/km - Rising from £165 to £170
- Between 131 and 140g/km - Rising from £195 to £200
- Between 141 and 150g/km - Rising from £215 to £225
- Between 151 and 165g/km - Rising from £265 to £275
- Between 166 and 175g/km - Rising from £315 to £325
- Between 176 and 185g/km - Rising from £345 to £360
- Between 186 and 200g/km - Rising from £395 to £410
- Between 201 and 225g/km - Rising from £430 to £445
- Between 226 and 255g/km - Rising from £735 to £760
- Over 255g/km - Rising from £750 to £790
This structured increase means that vehicles with emissions above 120g/km will see their annual tax bills rise, with the most substantial hikes affecting the highest-emitting cars. Drivers are advised to check their vehicle's official CO2 emissions figure, typically found on the V5C registration certificate, to determine which band applies and to budget accordingly for the increased costs from April onwards.
