British drivers are set for a New Year financial blow as the government confirms significant increases to Vehicle Excise Duty (VED), commonly known as road tax. The hikes, which will take effect from 1 April 2026, will impact millions of motorists across 13 different tax bands for petrol and diesel cars.
Inflation Drives Post-Christmas Tax Rises
The annual uprating of tax bands, linked to inflation, means costs will rise shortly after the Christmas and New Year period. The adjustments apply to cars first registered on or after 1 March 2001 but before 1 April 2017. The Treasury, under the Labour Chancellor, considers factors including inflation, roads policy, and vehicle emissions when setting the annual VED rates.
Breaking Down the 2026 VED Band Increases
Detailed tables published by motoring experts, including Pete Barden, reveal the new rates for the upcoming tax year. The most substantial increase targets vehicles in the highest emission band.
Band M, the highest category, will see a £30 annual rise, taking the total VED cost for those vehicles to £790. All other bands for these older petrol and diesel models will also see proportional increases, though the specific amounts for each band below M are detailed in the official government tables.
Change for Zero-Emission Cars
In a separate move, the government is also altering the rules for electric vehicles. From April 2026, the Expensive Car Supplement (ECS) threshold for zero-emission cars will increase from £40,000 to £50,000.
This means electric cars with a list price between £40,000 and £50,000 will no longer have to pay the extra ECS charge when they take out a licence on or after 1 April 2026, provided it is not their first vehicle licence. The threshold for all other cars will remain at £40,000.
What the VED Changes Mean for Drivers
The confirmed changes, outlined in budget documents released last week, signal a continued focus on using tax policy to influence motoring costs. Drivers of older, more polluting petrol and diesel cars will feel the pinch most acutely, particularly those in the highest emission bands.
Motorists are advised to check their vehicle's tax band to understand precisely how much more they will need to pay from the start of the new financial year in 2026.
