Road tax 2026: The latest car tax changes explained

UK drivers are bracing themselves for tax increases from April 2026. With vehicle tax changes approaching, it’s a good time to understand what you can expect to pay. Although it can feel complicated, being informed will help you plan your budget for the year ahead and better assess the costs involved if you’re thinking about upgrading your vehicle. Here’s what you need to know for 2026.

When will the new car tax regulations take effect?

Vehicle Excise Duty (VED), more commonly known as car tax or road tax, is set to increase from 1 April 2026 as the government updates rates in line with the Retail Price Index for the 2026/27 tax year. 

The changes to how car tax works in 2026, including uprated bands and adjustments were introduced in the 2025 Autumn Budget, and confirmed in the Spring Statement on 3 March 2026 with no new measures announced.

What are the latest tax changes and when do they apply?

Changes coming into effect in April 2026: 

• From April, owners of most electric vehicles (EVs) will see the standard VED rate of £195 rise to £200 per year. New zero-emission cars registered on or after 1 April 2026 will pay a £10 first-year rate before switching to the £200 standard rate.
• The threshold for the Expensive Car Supplement (known colloquially as the ‘luxury car tax’) for zero-emission cars will rise from £40,000 to £50,000. Owners of zero-emission cars with a list price of £50,000 or above will pay £440 per year on top of the standard VED. The change will be applied retrospectively, meaning that EV cars registered from 1 April 2025 with a list price of over £40,000 but below £50,000 will not be required to pay the charge.
• Vehicles with the highest emissions (those producing over 255g/km of CO₂) will see a £200 increase in their road tax. This will take the cost from £5,490 to £5,690 for the first year of registration. For comparison, first year rates for average petrol cars (143g/km) are £560. This hike is expected to affect around 60 makes and models of car, ranging from Land Rover Defenders to super cars like the Lamborghini Revuelto and classics like the Ford Mustang. 
• From 6 April 2026, the Benefit-in-Kind (BIK) rate for fully electric company cars will rise from 3% to 4% for the 2026/27 tax year. This change is part of the scheduled phased increases in EV company car tax rates. Other company car BIK rates for petrol, diesel and hybrid vehicles continue to depend on CO₂ emissions bands and are not subject to the same flat rate increase.
• If your car was first registered after March 2001 and before 2017, you will be subject to vehicle tax changes based on previous bands according to CO₂ emissions.

Changes coming into effect in 2028: 

• From 1 April 2028, EVs and plug-in hybrids will be subject to a new pay-per-mile Electric Vehicle Excise Duty (eVED). The projected increase is 3p per mile for EVs and 1.5p per mile for hybrids. Details of how mileage will be recorded have yet to be announced. 

What tax rates should you consider when buying a new car?

When buying most brand-new cars, you’ll need to pay the first year of tax in advance. The amount will depend on your fuel type and CO₂ emissions.

However, if you purchase a brand-new electric car, you will pay £10 for the first year before moving to the standard rate of car tax.

If you’re buying a used car, the previous owner’s tax will not be transferred to you, even if the period that owner covered has not yet elapsed. You will need to tax it before driving.

To tax a vehicle, you must have car insurance in place and if your car is over three years old (four years in Northern Ireland) you will also need to provide a valid MOT.

Bear in mind that if you buy a used car that originally had a list price above £40,000 (or above £50,000 for electric vehicles from April 2026), you will be liable for the Expensive Car Supplement (‘luxury car tax’). This adds £440 per year on top of the standard road tax, taking the annual total to around £640. The supplement applies for five years, starting in the second year after first registration.

You can find full details of the different car tax rates on the GOV.UK website. 

How is UK car tax calculated?

These three baseline measures will be used to calculate the tax you are liable for:

1. Date of first registration
2. CO₂ emissions
3. Fuel type (petrol, diesel, alternative or EV)

Where can I find my details?

Your vehicle logbook (V5C) will have a record of your vehicle registration date and emissions. Alternatively, you can use the government’s Vehicle Enquiry Service. This will allow you to access information including your tax and MOT status, as well as additional vehicle details. You will need your registration number to hand to access the service. 

What about fuel duty?

Last year’s Budget saw the 5p-per-litre fuel duty frozen until 31 August 2026. It was expected that when this period elapsed, duty would rise gradually, with a further 1p per litre being added on 1 September, another 2p per litre on 1 December, and a final 2p per litre on 1 March 2027 (with the exact increases to be confirmed in September 2026).

However, in light of the current conflict in the Middle East, the planned increases are under review and may be subject to change.

For more updates, keep an eye on our news page.