Rachel Reeves has confirmed that owners of cars made before 2017 may face a vehicle tax charge of £170. The latest vehicle tax bands for 2026/27 have come into effect, impacting millions of motorists who will now pay more each year.
New Tax Bands for 2026/27
Under the current system, vehicles are divided into 13 tax bands based on CO₂ emissions. Cars in Band D, which covers emissions between 121 g/km and 130 g/km, will now cost £170 annually. The standard rate for most cars made since 2017 remains around £200, but older models may see varying costs depending on their emission levels.
Expert Insight
Andy Wood, tax expert at Tax Barrister UK, noted: "Many drivers assume road tax depends solely on vehicle age, but emissions are a major factor. Even small differences in CO₂ output can push vehicles into different bands, significantly affecting annual costs."
Changes for Low-Emission Vehicles
Recent rule changes have also ended free road tax for vehicles emitting under 100 g/km of CO₂. These drivers now pay at least £20 a year. Electric vehicle owners are also now subject to vehicle tax. Wood added: "The removal of the zero-rate band has surprised some drivers who were used to paying nothing. While £20 seems small, it reflects a broader move to include more vehicles in the VED system."
