Motorists across the United Kingdom are being alerted to a significant rise in their annual road tax bills, with some drivers of older vehicles facing charges of up to £790 from 2026.
Inflation-Linked Hike Set for April 2026
The scheduled increase in Vehicle Excise Duty (VED) is confirmed to take effect from April 1, 2026. The government has stated that the annual VED rates will be uprated in line with the Retail Price Index (RPI) measure of inflation. This change was announced in the Budget 2025 and will be legislated in the forthcoming Finance Bill 2025-26.
This adjustment means that almost all vehicle owners will pay more. For cars registered after April 2017, the standard annual rate is expected to exceed the current £195 fee. Critically, owners of petrol, diesel, and electric vehicles will all be impacted by the rise.
Older Cars Face Steepest Increases
The most substantial financial burden will fall on drivers of cars registered between March 2001 and April 2017. These vehicles continue to be taxed based on their official CO2 emissions, with rates rising annually with inflation.
Under the new rates coming into force in 2026, vehicles in the highest emission bands will see the sharpest climbs:
- Cars emitting over 255g/km of CO2 will see their annual VED jump to £790, an increase of £30.
- Vehicles producing between 226g/km and 255g/km will face a £25 rise, from £735 to £760.
- For cars in the 201g/km to 225g/km band, bills will increase from £430 to £445.
As explained by consumer champion Which?, these older cars are placed into one of 13 tax bands, labelled A to M, based solely on their CO2 output. The impending hike will apply to vehicles with registration plates from '01' up to '17', and may also affect those with plates from '61' to '77', potentially pushing their annual charge to around £795.
What This Means for UK Drivers
The confirmation from HM Revenue and Customs (HMRC) solidifies the financial planning challenge for millions of households. With the rise tied to RPI, future increases remain subject to inflationary pressures, adding a layer of uncertainty to long-term motoring costs.
This policy underscores the ongoing cost of running older, less efficient vehicles in the UK. Drivers concerned about their future tax liability are advised to check their vehicle's CO2 emissions band and prepare for the increased expense from April 2026.
