Car Tax Hikes to Launch Next Month with Some Drivers Facing £5,690 Charge
Car tax hikes are set to take effect within weeks, as Chancellor Rachel Reeves introduces significant increases in Vehicle Excise Duty (VED) rates starting from April 1, 2026. The Labour Party Chancellor confirmed these changes in the recent Autumn Budget, aligning the duty for cars, vans, and motorcycles with the Retail Price Index from the new financial year.
Details of the New VED Rates
Under the new structure, zero-emission cars will maintain a first-year rate of just £10 until 2029-2030, with modest increases for vehicles emitting between one and 50g of CO2 per kilometre. For example, vehicles in this band, including hybrids, will pay £110 in the first year of registration, covering the initial 12 months on the road.
However, vehicles emitting more than 76g/km will see costs double, with the most polluting vehicles facing a staggering £5,490 charge. With the upcoming inflation-related rise for VED first-year rates, motorists investing in the most polluting vehicles could end up paying as much as £5,690, according to Labour Party statements.
Expected First-Year Car Tax Rates from April 1, 2026
- 0g/km - Remains at £10
- 1-50g/km - Rising from £110 to £115
- 51-75g/km - Rising from £130 to £135
- 76-90g/km - Rising from £270 to £280
- 91-100g/km - Rising from £350 to £365
- 101-110g/km - Rising from £390 to £405
- 111-130g/km - Rising from £440 to £455
- 131-150g/km - Rising from £540 to £560
- 151-170g/km - Rising from £1,360 to £1,410
- 171-190g/km - Rising from £2,190 to £2,270
- 191-225g/km - Rising from £3,300 to £3,420
- 226-255g/km - Rising from £4,680 to £4,850
- Over 255g/km - Rising from £5,490 to £5,690
These adjustments reflect the government's focus on incentivising cleaner vehicles while imposing higher costs on those with greater environmental impact. The Treasury's documents highlight the sharp increases for high-emission categories, aiming to steer consumer choices towards more sustainable options.
Motorists are advised to review their vehicle's emissions and prepare for the upcoming changes, as the new rates will apply from the start of the next financial year. This move is part of broader efforts to address air quality and climate concerns through fiscal policy.
