Motorists across the UK now face higher Vehicle Excise Duty (VED) charges, with some popular vehicles set to cost £170 annually starting April 1, 2026. These adjustments align with inflation and affect owners of petrol, diesel, and electric cars registered between 2001 and 2017.
VED Rate Increases by Band
Tax bands, based on CO2 emissions, determine annual fees. Vehicles in band D, which emit 121-130g/km of CO2, see fees rise £5 to £170 for the 2026/27 tax year. This follows last year’s increase from £160 to £165.
Higher-emission models face steeper hikes. Cars producing over 255g/km pay £790, while band L vehicles (226-255g/km) owe £760 per year. These changes apply universally, mirroring Retail Price Index (RPI) adjustments.
Common petrol and diesel hatchbacks, along with compact SUVs, typically fall into these categories and dominate UK roads.
Compliance and Options for Drivers
Paying VED remains a legal requirement for using public roads. Drivers must tax their vehicles accordingly or face penalties.
Those not using their cars can apply for a Statutory Off Road Notification (SORN) to halt payments.
Official Confirmation
HM Revenue and Customs (HMRC) has verified the updates, stating: “As announced at Budget 2025, the Government will introduce legislation in Finance Bill 2025-26 to uprate Vehicle Excise Duty rates for cars, vans and motorcycles in line with the Retail Price Index (RPI) for 2026 to 2027. This will take effect from 1 April 2026.”
