British drivers are set to face a series of significant motoring law changes throughout 2026, with updates impacting everything from vehicle tax and fuel duty to new road charges and safety regulations. These adjustments will affect millions of motorists, with financial implications for drivers of petrol, diesel, electric, and hybrid vehicles alike.
Tax Hikes and the End of Electric Vehicle Exemptions
One of the most immediate changes concerns Vehicle Excise Duty (VED). Standard VED rates rose in line with Retail Price Index (RPI) inflation from April 2025, with a notable shift seeing the standard rate increase from £190 to £185 per annum. However, the first-year VED charges for the most polluting new petrol and diesel cars have seen a massive rise, potentially costing owners thousands of pounds more.
In a landmark shift, electric car and hybrid owners will pay VED for the very first time as their exemptions officially come to an end. This move marks a new era where all vehicle types contribute directly to road taxation.
New Road Charges and Tunnel Tolls
Local congestion charging is expanding. From October 2025, a new £5 daily charge for car drivers was introduced on six streets in Oxford as a temporary measure. The charging points are located on Hythe Bridge Street, St Cross Road, St Clement's Street, Thames Street, Marston Ferry Road, and Hollow Way.
In London, major changes are coming to river crossings. The Blackwall Tunnel will charge motorists for the first time, alongside the new Silvertown Tunnel, to manage congestion. Drivers of cars and small vans will pay £4 each way during peak hours. Meanwhile, charges at the vital Dartford Crossing were increased for the first time since 2014 to manage demand on this critical Thames crossing.
Regulatory Changes and Driver Compensation
Several regulatory updates will also come into force. From October 2025, all new London taxi driver licence applicants must pass the new Safety, Equality and Regulatory Understanding (SERU) assessment, focusing on fares, equality, disabilities, and licensing rules.
In positive news for some, the Financial Conduct Authority (FCA) is progressing its investigation into the car finance scandal. Following a Supreme Court ruling in August 2025 that limited some compensation claims, the FCA has proposed a redress scheme that could cost lenders around £9 billion. Affected drivers could receive an average of £700 per agreement where car finance deals were mis-sold.
Furthermore, from August 1, 2025, citizens of the Republic of Moldova living in the UK gained the right to exchange their driving licences for British ones without taking a test.
As always, the DVLA's number plate changes will continue bi-annually in March and September, with '25' plates launched in March 2025 and '75' plates following later in the year, a cycle that influences dealership pricing.
These combined changes signal a transformative period for UK transport, focusing on revenue, congestion management, and enhanced safety, requiring drivers to stay vigilant to navigate the new rules and costs effectively.
