Older drivers across the United Kingdom are set to be impacted by significant changes to Vehicle Excise Duty, commonly known as car tax or road tax, which will come into effect from April 2026. This mandatory fee, required for most motorists to legally operate their vehicles on public roads, is undergoing annual adjustments that will affect a broad spectrum of drivers.
Understanding the Upcoming Road Tax Increases
The amount payable for Vehicle Excise Duty is primarily determined by three key factors: the initial registration date of the vehicle, the type of fuel it utilises, and the level of tailpipe carbon dioxide emissions it produces. Each year, the Labour Party government automatically adjusts these rates in alignment with inflation, ensuring they reflect current economic conditions.
From 1st April 2026, these adjustments will take place for the 2026/27 financial year, resulting in increased costs for many drivers. Notably, older motorists, including those aged over seventy, will not be exempt from these rises, meaning they must prepare for higher annual expenses.
Changes to the Luxury Car Tax Threshold
In a parallel development, the Expensive Car Supplement, often referred to as the luxury car tax, has seen its threshold increased for electric vehicle purchasers. The limit has been raised from £40,000 to £50,000, a change that applies to electric cars registered from 1st April 2025 onwards.
Consequently, if an electric vehicle was first registered after 1st April 2025 and has a list price that does not exceed £50,000, the owner will not be required to pay the additional luxury car tax. This supplementary fee typically adds £425 per year, bringing the total annual Vehicle Excise Duty to £620 for affected vehicles.
Expert Insights and Projections
The RAC has provided valuable commentary on these impending changes, stating: "While the car tax rates for April 2026 onwards have yet to be released, we're expecting the cost of VED in 2026 to be £200 for most newer car drivers - up from £195. This rises in line with the Retail Price Index (RPI)."
They further clarified: "If your vehicle had a list price that exceeded £40,000 when it was first sold (or £50,000 if your car is electric) then you may also be liable for the 'luxury car tax' fee, which adds £425 to the vehicle's annual VED costs - taking it up to £620."
Variations Based on Vehicle Age
It is important to note that drivers may pay different amounts depending on when their car was first used. Vehicles registered before 2017 are subject to alternative calculation methods, meaning some motorists could face lower or higher charges than those with newer models.
The precise annual road tax fee ultimately depends on several specific factors:
- The year the vehicle was first registered
- The type of fuel the car uses
- The tailpipe emissions produced by the vehicle
As these changes approach, drivers of all ages are advised to review their vehicle details and prepare for the adjusted financial commitments that will commence in April 2026.
