From 1 April 2026, the rules around Vehicle Excise Duty (VED), what most people call car tax or road tax, have changed. The standard annual rate has risen, first-year charges on new high-emission cars have jumped significantly, and electric vehicles face updated rules too. If you’re buying your first car, or renewing soon, here’s exactly what you need to know.
What is VED and who has to pay it?
VED is the annual tax you pay to keep or use a vehicle on a public road. It’s collected by the DVLA and applies to almost every registered vehicle in the UK, including those on a £0 rate. Even if you owe nothing, you still need to formally tax the vehicle.
You can pay online at gov.uk/vehicle-tax, by phone, or at a Post Office. You can choose to pay annually, every six months, or monthly by Direct Debit. The six-month and monthly options both carry a 5% surcharge over the yearly rate.
One thing many first-time buyers miss: car tax does not transfer when a vehicle is sold. The seller receives a refund for any full months left, and you need to tax the car yourself before you drive it away. You’ll need the green new keeper slip (V5C/2) from the logbook to do this online.
Driving without valid tax can mean an automatic £80 fine, clamping, or impoundment. If you need to keep a car off the road, declare a free SORN at gov.uk/sorn.
What’s changed from April 2026?
The government increases VED rates each year in line with the Retail Price Index (RPI). The 2026/2027 changes are modest for most everyday drivers, but significantly more painful for buyers of new high-emission vehicles. Here’s a summary:
| Change | 2025/2026 rate | 2026/2027 rate |
|---|---|---|
| Standard rate (post-April 2017 cars) | £195/yr | £200/yr |
| Expensive Car Supplement (petrol/diesel/hybrid) | £425/yr | £440/yr |
| Expensive Car Supplement threshold (EVs) | £40,000 | £50,000 |
| First-year rate (zero-emission cars) | £10 | £10 (unchanged) |
| First-year rate, top band (over 255 g/km) | £5,490 | £5,690 |
| Band A–C pre-2017 cars (up to 120 g/km) | £20–£35/yr | Small RPI rise |
The £5 rise in the standard rate will be the main change most young drivers notice on their renewal notice. For a second-hand post-2017 car, that’s all you pay: £200 per year flat, with no emissions calculation needed.
Cars registered after April 2017
Standard rate: £200 per year from April 2026
If your car was first registered on or after 1 April 2017, your annual VED from April 2026 is a flat £200, regardless of fuel type or emissions. This applies to petrol, diesel, hybrid, and electric vehicles once they move beyond their first year of registration.
Payment options from April 2026:
- Annual lump sum: £200
- Six months: £110
- Monthly Direct Debit: £210 total (12 x £17.50). Note the 5% surcharge applies
First-year ‘showroom tax’ for new cars
Buying a brand-new car registered on or after 1 April 2026? You’ll pay a first-year rate based on CO₂ emissions. This is typically bundled into the on-the-road price by the dealer. Rates have risen across most bands from 2025/26, with the biggest jumps at the high-emission end.
| CO₂ emissions (g/km) | Petrol / hybrid | Diesel (non-RDE2) |
|---|---|---|
| 0 (zero-emission) | £10 | £10 |
| 1–50 | £115 | £135 |
| 51–75 | £135 | £280 |
| 76–90 | £280 | £360 |
| 91–100 | £360 | £400 |
| 101–110 | £400 | £455 |
| 111–130 | £455 | £560 |
| 131–150 | £560 | £1,360 |
| 151–170 | £1,360 | £2,190 |
| 171–190 | £2,190 | £3,300 |
| 191–225 | £3,300 | £4,680 |
| 226–255 | £4,680 | £5,490 |
| Over 255 | £5,690 | £5,690 |
Zero-emission cars remain at just £10 in year one, unchanged from 2025/26. The top rate of £5,690 applies to any new car emitting over 255 g/km, a £200 rise from 2025/26. For context, a typical family petrol car around 130 g/km will pay £560 in year one, then drop to the standard £200 from year two.
The expensive car supplement (‘luxury car tax’)
Cars with an original list price over £40,000 (or £50,000 for electric vehicles from April 2026) attract an additional £440 per year on top of the standard rate for five years, starting from year two. That brings the total annual bill to £640.
The rise in the EV threshold from £40,000 to £50,000 is a meaningful change for anyone considering a mid-range electric car. Models such as the Kia EV4 that previously triggered the supplement will now avoid it. For petrol and diesel buyers, the threshold stays at £40,000.
Quick check: The supplement is based on the original manufacturer’s list price (including optional extras), not the second-hand price you paid. A used £60,000 car you bought for £35,000 can still attract the supplement if it was over the threshold when new.
Cars registered between March 2001 and March 2017
If you’re buying an older car, VED works differently. Instead of a flat rate, you pay an annual amount tied to your car’s CO₂ emissions band, and that rate applies every year you own the vehicle, not just in year one. This is where choosing wisely really counts.
| Band | CO₂ (g/km) | 2025/26 rate | 2026/27 rate |
|---|---|---|---|
| A | Up to 100 | £20 | ~£20 |
| B | 101–110 | £20 | ~£20 |
| C | 111–120 | £35 | ~£35 |
| D | 121–130 | £165 | ~£170 |
| E | 131–140 | £195 | ~£200 |
| F | 141–150 | £215 | ~£220 |
| G | 151–165 | £265 | ~£270 |
| H | 166–175 | £315 | ~£325 |
| I | 176–185 | £345 | ~£355 |
| J | 186–200 | £395 | ~£405 |
| K | 201–225 | £430 | ~£440 |
| L | 226–255 | £735 | ~£760 |
| M | Over 255 | £760 | ~£790 |
Note: 2026/27 rates for pre-2017 cars are RPI-linked estimates. Confirmed figures are published at gov.uk/vehicle-tax-rate-tables.
Bands A–C represent cars emitting up to 120 g/km. Annual tax is just £20–£35, a significant saving compared with a Band M car at around £790.
The jump from Band C to Band D is stark: just 1 g/km of CO₂ extra costs an additional £135 per year in 2026/27. Small engine hatchbacks such as the Ford Fiesta 1.0, VW Polo 1.0 and Vauxhall Corsa 1.2 typically sit in Bands B–D, keeping annual tax well under £200.
Electric vehicles: what’s changed in 2026?
The big EV shift happened in April 2025, when electric vehicles lost their full VED exemption for the first time. From April 2026, the rules bed in further:
- New EVs: £10 first-year rate, then £200/yr standard rate from year two
- Existing EVs registered April 2017–March 2025: £200/yr from April 2026 (up from £195)
- Older EVs registered before April 2017: ~£20/yr (RPI-linked)
- Expensive Car Supplement threshold for EVs: rises to £50,000 from April 2026
The day-to-day running cost advantage of an EV remains real. Home charging costs roughly 5–6p per mile versus 11–12p for petrol, but the ‘free road tax’ era is over. If you’re weighing up an EV as a first car, factor in the £200 annual VED from year two.
Looking further ahead: the government has confirmed a pay-per-mile electric vehicle duty from April 2028 at 3p per mile for pure EVs. An average young driver covering 8,000 miles a year would pay around £240 on top of standard VED. Check the gov.uk eVED consultation for the latest.
How to check your car’s tax band
The quickest way is the free gov.uk vehicle enquiry service. Enter any registration number and you’ll see the car’s tax status, CO₂ emissions, fuel type, and MOT history, with no login needed.
For pre-2017 cars, you’ll need three things from the V5C logbook: registration year, fuel type, and CO₂ figure. Cross-reference with the band table above to find the annual cost. Citizens Advice recommends always checking the original V5C, never a photocopy, before buying any used car.
Don’t forget: Car tax and insurance group are separate systems. A low tax band doesn’t mean cheap insurance. Check both before committing to a car. Our guide to low insurance group cars explains what to look for.
What this means for young drivers
For most young drivers buying a used post-2017 car, the practical impact of the April 2026 changes is simple: your annual VED is £200. That’s £5 more than last year and a predictable cost you can budget for.
Where the choice of car really matters is in insurance costs, not tax. The ABI notes that motor insurance for 17–21-year-olds can consume around 10% of average annual earnings. With over 100 providers to choose from, shopping around and choosing a car in a low insurance group makes far more difference to your total running costs than any VED band.
Telematics insurance, which tracks your driving via a smartphone app, a plug-in device, or a professionally fitted unit, can cut premiums significantly for new drivers who build a safe record. Tax is just one piece of the running cost puzzle, but knowing the rates means no nasty surprises when your renewal comes through.
