Chancellor Rachel Reeves has confirmed that vans registered after March 2001 will be subject to a £360 Vehicle Excise Duty (VED) charge from April 2026, as part of a wider shake-up of road tax rates. The increase, up from £345 in 2025, applies to all light goods vehicles in tax class 39, while early Euro 4 and Euro 5 compliant vans will continue to pay a reduced rate of £140.
VED Rate Changes for Vans
Under the new system, light goods vehicles (tax class 39) registered on or after 1 March 2001 will pay £360 for a 12-month licence or £198 for six months. This represents a £15 increase from the 2025 rate of £345. In contrast, Euro 4 compliant vans registered between 1 March 2003 and 31 December 2006, and Euro 5 compliant vans registered between 1 January 2009 and 31 December 2010, will remain at £140 for 12 months or £77 for six months.
Government Justification
HMRC explained: “As announced at Budget 2025, the Government will introduce legislation in Finance Bill 2025-26 to uprate Vehicle Excise Duty rates for cars, vans and motorcycles in line with the Retail Price Index (RPI) for 2026 to 2027. This will take effect from April 1, 2026.” The Treasury added that most motorists will pay an annual VED payment of £140, with higher rates only for cars above £40,000.
Impact on Van Owners
AutoTrader noted: “Vehicle Excise Duty (VED), sometimes referred to as road tax, is a legal requirement for driving any van or vehicle on the UK’s roads. VED payable differs for cars and vans. The good news is that working out your VED is usually simpler for vans – van owners pay a flat rate set out by the DVLA. You can either make a single payment for the next six or 12 months, or you can pay in instalments each month.”
The changes mean that van owners with vehicles registered after 2001 will face higher costs from April 2026, while those with older, cleaner Euro 4 and Euro 5 vans will see no increase. The government says the move is designed to keep VED rates in line with inflation.
