Drivers of low-emission vehicles are being caught off guard by changes to car tax rules, with some now facing charges for the first time. The latest Vehicle Excise Duty (VED) rates for 2026/27 have come into effect, impacting owners of cars in Band A with emissions up to 100g/km.
New £20 Charge for Previously Exempt Cars
Previously, owners of low-emission cars made before 2017 paid no tax, a perk for environmentally-friendly vehicles. However, they now face a new £20 annual charge. The Treasury confirmed the updated rates, and the DVLA is now collecting payments, which may surprise many motorists.
Shift in Government Policy
The change follows a broader shift in policy targeting lower-emission models. Electric vehicle (EV) owners were required to pay standard VED for the first time in 2025. Andy Wood, tax expert at Tax Barrister UK, said: “The removal of the zero-rate band for cars emitting under 100g/km has caught some drivers off guard because many had become used to paying nothing at all.”
Wood added: “While £20 may not sound substantial on its own, it reflects a wider shift towards bringing more vehicles into the VED system regardless of emissions performance. A lot of drivers still assume road tax is calculated purely on the age of the vehicle, but emissions remain one of the biggest factors in determining how much motorists pay. Even relatively modest differences in CO2 output can place vehicles into entirely different tax bands, which can have a noticeable impact on annual running costs.”
Impact on Motorists
Drivers are urged to check their tax band as the changes take effect. The new rates apply from 2026/27, and those affected should receive notification from the DVLA. The move is part of the government’s strategy to broaden the tax base and encourage further reductions in vehicle emissions.
