Car Tax Rise for Post-2017 Vehicles Set for April 2026
Owners of cars registered after 2017 will face a new car tax increase starting on April 1, 2026. From this date, the standard rates of Vehicle Excise Duty (VED) will be adjusted upwards in accordance with Retail Price Index (RPI) inflation. This change means that if your vehicle was first registered after April 2017, the flat standard rate will climb from £195 to £200 per year.
This adjustment applies uniformly, regardless of whether the vehicle is petrol, diesel, hybrid, or electric, once it enters the standard-rate period. The increase will be reflected on your next renewal notice after April 1, 2026.
Understanding Vehicle Excise Duty
VED, commonly referred to as road tax or car tax, is the annual fee required to legally operate a vehicle on UK public roads. It is paid to the Driver and Vehicle Licensing Agency (DVLA), and the amount due depends on several key factors: the vehicle's fuel type, its CO₂ emissions, the year it was first registered, and its original list price when new.
For the majority of cars registered after April 1, 2017, the standard flat annual VED rate has been raised from £195 to £200, marking a £5 increase that aligns with the Retail Price Index (RPI). This applies to petrol, diesel, hybrid, and electric vehicles within this registration category.
Larger Increases for High-Emission Vehicles
The more substantial hikes target vehicles with higher CO₂ emissions at the point of first registration. First-year VED rates, often dubbed the "showroom tax," have seen significant rises for the most polluting new cars.
A car emitting over 255g/km of CO₂ now faces a first-year rate of £5,690, which is £200 higher than the previous year. Even an average new petrol car, with emissions around 143g/km, carries a first-year charge of £560, while an average new diesel sees this rise to £1,360.
These steep first-year charges are strategically designed to discourage the purchase of high-emission vehicles and incentivise buyers to opt for cleaner alternatives.
Annual VED Adjustments for Emission Bands
Vehicles in this bracket are taxed based on CO₂ emission bands rather than a flat rate. Most bands have experienced modest increases in line with inflation.
Cars emitting between 226 and 255g/km will see their annual VED rise to approximately £760, while those emitting more than 255g/km will face around £790 per year.
