Quick Summary: From 1 April 2026, Vehicle Excise Duty (VED) has risen across the board. The standard annual rate is now £200 for most cars registered after April 2017. Electric vehicles continue to pay road tax (introduced April 2025), first-year rates for high-emission cars now reach £5,690, and the luxury car supplement threshold for EVs has jumped to £50,000. Read on for every rate, every band, and every rule explained clearly.
Table of Contents
What Is Car Tax (VED) in the UK?
Vehicle Excise Duty (VED) — commonly called road tax, car tax, or vehicle tax is a mandatory annual charge that most UK drivers must pay to use or keep a vehicle on public roads. It is administered by the Driver and Vehicle Licensing Agency (DVLA) and collected on behalf of HM Treasury.
Despite its historic nickname “road tax,” the revenue does not go exclusively into road maintenance. The billions collected annually go into the government’s general fund, supporting public services ranging from the NHS to education.
How Is VED Calculated?
Your car tax amount depends on four key factors:
- Registration date — when your vehicle was first registered
- Fuel type — petrol, diesel, hybrid, electric, or alternatively fuelled
- CO₂ emissions — in grams per kilometre (g/km)
- List price — the original manufacturer’s retail price when new
These factors determine which rate and which band applies to your vehicle. The system changed significantly in April 2017 and has been updated every April since.
What Are the Key VED Changes From April 2026?
From 1 April 2026, the UK government increased VED rates in line with Retail Price Index (RPI) inflation, while making structural changes to incentivise low-emission vehicles. These changes were announced by Chancellor Rachel Reeves as part of the Autumn Budget 2024.
What changed from 1 April 2026 — full comparison:
Official source: GOV.UK Vehicle Tax Rate Tables
2026/27 Standard Annual VED Rate
For the majority of UK drivers with a petrol, diesel, hybrid, or electric car registered on or after 1 April 2017, the flat standard annual rate is now £200 per year.
This is an increase of £5 from the 2025/26 rate of £195. It applies from the second year of registration onwards, regardless of your car’s CO₂ emissions or fuel type.
Payment Options and Costs
Payment Method | 2026/27 Cost |
Annual (single upfront payment) | £200 |
Every 6 months | £110 |
Monthly Direct Debit (12 instalments) | £210 total (5% surcharge) |
Tip: Paying annually is the cheapest option. Monthly Direct Debit adds approximately £10 per year due to the 5% surcharge.
First-Year VED Rates: New Cars Registered After April 2026
When you buy a brand-new car registered on or after 1 April 2026, you pay a first-year “showroom tax” based on your car’s CO₂ emissions. This is a one-off charge paid upfront at registration, and then you move to the standard rate from year two.
The 2026/27 first-year rates represent one of the most significant increases in recent years, particularly at the high-emission end. The top band has more than doubled compared to just two years ago.
First-Year VED Rates for New Cars (Registered On or After 1 April 2026)
| CO₂ Emissions (g/km) | Petrol / Diesel (RDE2) | Diesel (Non-RDE2) | Alternative Fuel / Hybrid | Zero Emission (EV) |
| 0 g/km | — | — | — | £10 |
| 1–50 g/km | £115 | £135 | £105 | — |
| 51–75 g/km | £135 | £280 | £125 | — |
| 76–90 g/km | £280 | £365 | £270 | — |
| 91–100 g/km | £365 | £405 | £355 | — |
| 101–110 g/km | £405 | £455 | £395 | — |
| 111–130 g/km | £455 | £560 | £445 | — |
| 131–150 g/km | £560 | £1,410 | £550 | — |
| 151–170 g/km | £1,410 | £2,270 | £1,400 | — |
| 171–190 g/km | £2,270 | £3,420 | £2,260 | — |
| 191–225 g/km | £3,420 | £4,850 | £3,410 | — |
| 226–255 g/km | £4,850 | £5,690 | £4,840 | — |
| Over 255 g/km | £5,690 | £5,690 | £5,680 | — |
Official source: GOV.UK V149 — Rates of Vehicle Tax (April 2026 PDF)
Which Cars Are Hit by the £5,690 Top Rate?
Any new car emitting over 255g/km of CO₂ now faces a £5,690 first-year tax bill. This typically covers:
- Large V8 performance cars (e.g. Ford Mustang V8)
- High-output diesel SUVs (e.g. certain Land Rover Defender trims)
- Heavy-duty 4x4s (e.g. Ineos Grenadier, Toyota Land Cruiser diesel)
- Larger sports cars with high-displacement engines
Around 45–59 new car models currently sold in the UK fall into this top band.
Car Tax for Pre-2017 Cars: CO₂ Emission Bands A–M
Vehicles first registered between 1 March 2001 and 31 March 2017 are taxed using a different system. Instead of a flat standard rate, your VED is based on your car’s CO₂ emissions band, and you pay the same band rate every year you own the vehicle.
2026/27 VED Bands for Cars Registered March 2001 – March 2017
Band | CO₂ Emissions (g/km) | Annual VED 2026/27 |
A | 0–100 | £20 |
B | 101–110 | £20 |
C | 111–120 | £35 |
D | 121–130 | £170 |
E | 131–140 | £200 |
F | 141–150 | £225 |
G | 151–165 | £275 |
H | 166–175 | £325 |
I | 176–185 | £360 |
J | 186–200 | £410 |
K | 201–225 | £445 |
L | 226–255 | £760 |
M | Over 255 | £790 |
Important change for Band A: From 1 April 2026, cars emitting under 100g/km — which previously qualified for a £0 rate — now pay £20 per year. Drivers of older, efficient petrol or hybrid models who have not paid VED before will need to register and pay from this point.
Official source: GOV.UK — Vehicle Tax Rate Tables
Electric Car Tax 2026: What EV Owners Pay
Electric vehicles are no longer exempt from VED. This change was introduced on 1 April 2025 under legislation originally passed in the Finance Act 2023. April 2026 is the first full financial year in which all EV owners pay road tax.
Here is how rates break down depending on when your EV was registered:
Electric Car VED Rates 2026/27
EV Registration Period | Annual VED Rate 2026/27 |
Registered on or after 1 April 2026 (new car) | £10 first year, then £200 from year two |
Registered April 2017 – March 2025 | £200 per year |
Registered March 2001 – March 2017 | £20 per year |
Registered before March 2001 | Based on engine size (pre-2001 rules) |
Official source: GOV.UK — Vehicle Tax for Electric, Zero and Low Emission Vehicles
Why Did EVs Lose Their VED Exemption?
The decision was made by the previous Conservative Government in Autumn Statement 2022, with Chancellor Jeremy Hunt arguing the system should be “fairer” and that “all motorists should pay a fair contribution.” The incoming Labour Government in 2024 did not reverse this policy, and it came into effect as planned.
The £10 First-Year Advantage
While EVs are no longer fully exempt, new electric cars do retain a significant pricing advantage at point of registration. A new EV pays just £10 in year one, compared to up to £5,690 for a high-emission petrol or diesel. This gap was deliberately widened in the 2024 Autumn Budget to maintain a financial incentive to choose zero-emission at the showroom.
Expensive Car Supplement (Luxury Car Tax) 2026
The Expensive Car Supplement (ECS) — widely referred to as the “luxury car tax” — is an additional annual VED charge applied to cars whose original list price exceeded a set threshold. It is paid on top of the standard £200 annual rate for five years, starting from the second year of registration.
2026/27 Expensive Car Supplement Rules
| Vehicle Type | ECS Threshold | Annual Supplement | Total Annual VED (Yr 2–6) |
| Petrol / Diesel / Hybrid | Over £40,000 | £440 | £640 |
| Zero-emission (electric) | Over £50,000 | £440 | £640 |
What Changed in April 2026?
The most important structural change in 2026 is the rise of the EV Expensive Car Supplement threshold from £40,000 to £50,000, effective from 1 April 2026. This change applies retroactively to zero-emission vehicles registered from 1 April 2025 onwards.
This means any electric car with a list price between £40,000 and £49,999 — which previously attracted the supplement — is now exempt from it. Given that the Society of Motor Manufacturers and Traders (SMMT) estimates over 70% of new EV models are listed above £40,000, this is a meaningful saving for a large number of EV buyers.
Example saving: An EV purchased at £47,000 that was subject to the old £40,000 threshold would have paid £440 per year for five years = £2,200 total. Under the new £50,000 threshold, it pays nothing on the supplement — a £2,200 saving.
Important: The threshold applies to the original manufacturer’s list price (including optional extras), not the price you paid or any discounts received. A used car bought for £30,000 can still attract the supplement if its new list price exceeded the relevant threshold.
Official source: GOV.UK — Vehicle Tax Rate Tables
How to Calculate Your Company Car Tax Liability
Your monthly company car tax is calculated as:
P11D value × BiK% × Income Tax Rate ÷ 12
For example, an electric company car with a P11D value of £40,000, at the 2026/27 BiK rate of 4%, for a basic-rate (20%) taxpayer:
£40,000 × 4% × 20% ÷ 12 = £26.67 per month
What Is the Pay-Per-Mile eVED System Coming in 2028?
Looking further ahead, the UK government has announced plans for a new Electric Vehicle Excise Duty (eVED) pay-per-mile system, scheduled to come into effect from April 2028.
How Will eVED Work?
Under the proposed scheme, electric and plug-in hybrid drivers will pay a per-mile charge in addition to the standard annual VED rate:
Vehicle Type | Per-Mile Charge |
Fully electric vehicles | 3p per mile |
Plug-in hybrid vehicles | 1.5p per mile |
According to government estimates, an average EV driver covering 8,000 miles per year would pay approximately £240 extra annually under the eVED system.
Privacy Protections
The government has confirmed that drivers will not be required to install GPS trackers or report where or when they drove. Mileage verification is expected to be handled through MOT testing centres. A public consultation on the scheme’s operation closed in March 2026, with further guidance expected ahead of the 2028 rollout.
Car Tax Exemptions: Who Doesn't Pay VED?
Certain vehicles and drivers are exempt from paying VED, though in most cases you must still register the vehicle as tax-exempt with the DVLA you simply pay £0.
Vehicles Exempt from VED
Category | Exemption Criteria |
Historic Vehicles | Manufactured more than 40 years before 1 January of the current year (pre-January 1986 as of 2026) |
Disabled Drivers | Receiving higher-rate mobility component of DLA, enhanced-rate mobility PIP, War Pensioners’ Mobility Supplement, or Armed Forces Independence Payment |
SORN Vehicles | Vehicles declared off-road with a Statutory Off Road Notification — cannot be driven on public roads |
Agricultural Vehicles | Tractors and machinery used exclusively for agriculture, horticulture, or forestry |
Mobility Aids | Mobility scooters, powered wheelchairs, and invalid carriages (max 8mph) |
Mowing Machines | Self-propelled grass-cutting equipment |
Disabled exemption: Applies to one vehicle registered in the disabled person’s name or their nominated driver’s name. GOV.UK Disabled Road Tax
Historic vehicle guidance: From 1 April 2026, vehicles manufactured before 1 January 1986 qualify. They must be registered in the “historic” tax class with DVLA and cannot be used commercially. GOV.UK Historic Vehicles
How to Pay Car Tax and Avoid Penalties
How to Tax Your Vehicle
You can tax your vehicle online, by phone on 0300 123 4321, or at a Post Office. You will need:
- Your vehicle registration number (number plate)
- Your V5C logbook (vehicle registration certificate) or a new keeper supplement (V5C/2)
- A valid MOT certificate (if applicable)
- Valid motor insurance
Use our Car Tax Check to confirm your current tax status and expiry date before renewing.
What Happens If You Drive Without Valid Tax?
Driving or keeping a vehicle on a public road without valid tax is a criminal offence. Penalties include:
- An automatic £80 fine (reduced to £40 if paid within 28 days)
- Vehicle clamping or impoundment
- Prosecution with fines up to £1,000
How to Tax a Car You Just Bought
When you buy a used car, tax cannot be transferred from the previous owner. You must tax the vehicle in your name before driving it on public roads. Read our full guide: How to Tax Your Car
Declare a SORN If Your Car Is Off the Road
If you are not using your vehicle, you can declare it off-road using a Statutory Off Road Notification (SORN). A SORN is free and means you do not need to pay VED while the vehicle is kept off public roads.
Apply for a SORN: GOV.UK — Make a SORN
Summary: 2026/27 UK Car Tax at a Glance
| Scenario | What You Pay |
| Standard post-2017 car (petrol/diesel/hybrid) | £200/year |
| New EV registered after April 2026 | £10 year 1, then £200/year |
| Existing EV (registered April 2017 – March 2025) | £200/year |
| High-emission new car (255g/km+) | £5,690 year 1, then £200/year |
| Pre-2017 low-emission car (Band A–C) | £20–£35/year |
| Pre-2017 high-emission car (Band M) | £790/year |
| Car over £40,000 (petrol/diesel) with supplement | £640/year (yr 2–6) |
| EV over £50,000 with supplement | £640/year (yr 2–6) |
| Historic vehicle (pre-1986) | £0 |
| Disabled driver (qualifying) | £0 |
