UK Car Tax Changes 2026: What Drivers Need To Know?
• February 2, 2026
UK car tax changes in 2026 affect petrol, diesel, hybrid and electric vehicle owners, with new Vehicle Excise Duty rates applying from 1 April 2026.
The standard annual VED rate has increased to £200, while buyers of the highest-emission new cars can face a first-year charge of £5,690.
Electric vehicle owners also need to understand changes to the Expensive Car Supplement, while company car drivers face higher Benefit-in-Kind rates.
The amount a driver pays can depend on the vehicle’s registration date, CO₂ emissions, fuel type and original list price.
Here is how the main UK car tax rules work for the 2026 to 2027 tax year.
Last Updated: 26.09.2026
What Changed With UK Car Tax From 1 April 2026?
Vehicle Excise Duty rates were updated from 1 April 2026. One of the most noticeable changes is the standard annual rate for most cars registered from April 2017, which increased from £195 to £200.
First-year rates for newly registered vehicles have also risen. Cars producing the highest levels of CO₂ can now attract an initial VED charge of £5,690.
Other important changes include:
- Standard VED: Increased to £200
- Highest First-Year VED: Increased to £5,690
- Expensive Car Supplement: Increased to £440 a year
- Electric Car Threshold: Increased to more than £50,000 for the Expensive Car Supplement
- Electric Company Cars: Zero-emission Benefit-in-Kind rate increased to 4%
The changes mean that motorists need to look beyond the headline standard rate when calculating the true annual tax cost of a vehicle.
UK Car Tax Changes 2025 Vs 2026
The following comparison shows several of the most important changes affecting drivers.
| Car Tax Rule | 2025 To 2026 | 2026 To 2027 |
|---|---|---|
| Standard Annual VED | £195 | £200 |
| Zero-Emission First-Year Rate | £10 | £10 |
| Highest First-Year VED | £5,490 | £5,690 |
| Expensive Car Supplement | £425 | £440 |
| EV Expensive Car Threshold | More Than £40,000 | More Than £50,000 |
| Petrol And Diesel Threshold | More Than £40,000 | More Than £40,000 |
| Zero-Emission Company Car BiK | 3% | 4% |
The EV threshold is particularly important because qualifying zero-emission vehicles with an original list price above £40,000 but not above £50,000 can avoid the Expensive Car Supplement under the new rules.
How Much Is The Standard UK Road Tax In 2026?
For most petrol, diesel, hybrid and electric cars registered from 1 April 2017, the standard rate after the first tax payment is £200 a year.
The payment method can affect the total amount paid.
| Payment Method | 2026 Cost |
|---|---|
| Single 12-Month Payment | £200 |
| 12-Month Direct Debit | £200 |
| 12 Monthly Direct Debit Payments | £210 |
| Single 6-Month Payment | £110 |
| 6-Month Direct Debit | £105 |
Drivers who choose monthly Direct Debit payments therefore pay slightly more over the full year than motorists who pay the £200 annual amount in one payment.
What Are The 2026 First-Year VED Rates By CO₂ Emissions?
A new car’s first Vehicle Excise Duty payment is primarily determined by its CO₂ emissions. The first-year rate can vary considerably between zero-emission vehicles and high-emission petrol or diesel cars.
| CO₂ Emissions | 2026 First-Year Rate |
|---|---|
| 0g/km | £10 |
| 1 To 50g/km | £115 |
| 51 To 75g/km | £135 |
| 76 To 90g/km | £280 |
| 91 To 100g/km | £365 |
| 101 To 110g/km | £405 |
| 111 To 130g/km | £455 |
| 131 To 150g/km | £560 |
| 151 To 170g/km | £1,410 |
| 171 To 190g/km | £2,270 |
| 191 To 225g/km | £3,420 |
| 226 To 255g/km | £4,850 |
| Over 255g/km | £5,690 |
These figures apply to petrol cars, qualifying diesel vehicles, alternative-fuel cars and zero-emission vehicles. Certain diesel cars that do not meet the required emissions standard can face a higher first-year charge.
Do Diesel Cars Pay More Road Tax In 2026?
Some diesel vehicles can pay more VED during their first year.
A diesel car that meets the Real Driving Emissions 2 standard is generally charged using the normal first-year emissions table. A diesel vehicle that does not meet the RDE2 standard is moved into a higher first-year tax category.
For example, a qualifying car producing between 131g/km and 150g/km of CO₂ has a first-year rate of £560. A diesel vehicle in the same emissions range that does not meet RDE2 can face a £1,410 first-year charge.
Drivers considering a new diesel car should therefore check both its CO₂ emissions and RDE2 status rather than relying only on its emissions figure.
How Much Car Tax Will You Pay Based On Your Car’s Registration Date?
Registration date is one of the most important factors when calculating VED because the UK uses different tax systems for different generations of vehicles.
Cars Registered Before 1 March 2001
Cars registered before 1 March 2001 are generally taxed according to engine size rather than modern CO₂-based VED bands.
This means their tax calculation works differently from newer vehicles. Owners should check the vehicle’s engine capacity and current VED category when determining the applicable rate.
Cars Registered Between 1 March 2001 And 31 March 2017
These vehicles generally use CO₂-based bands ranging from A to M.
| Band | CO₂ Emissions | 2026 Annual Rate |
|---|---|---|
| A | Up To 100g/km | £20 |
| B | 101 To 110g/km | £20 |
| C | 111 To 120g/km | £35 |
| D | 121 To 130g/km | £170 |
| E | 131 To 140g/km | £200 |
| F | 141 To 150g/km | £225 |
| G | 151 To 165g/km | £275 |
| H | 166 To 175g/km | £325 |
| I | 176 To 185g/km | £360 |
| J | 186 To 200g/km | £410 |
| K | 201 To 225g/km | £445 |
| L | 226 To 255g/km | £760 |
| M | Over 255g/km | £790 |
Band K can also include some cars producing more than 225g/km that were registered before 23 March 2006.
Cars Registered From 1 April 2017
For most cars registered from 1 April 2017, the first payment depends on CO₂ emissions. From the second tax payment onwards, the standard rate is generally £200.
Higher-value vehicles may also be subject to the Expensive Car Supplement.
What Are The 2026 Car Tax Changes For Electric Cars?
Electric cars are no longer automatically exempt from Vehicle Excise Duty.
The exact amount depends on when the vehicle was registered.
Electric and zero-emission cars first registered from 1 April 2025 pay £10 for their first year. After that, they move to the standard £200 annual rate.
Electric cars registered between 1 April 2017 and 31 March 2025 generally pay the £200 standard rate in 2026.
Older electric cars registered between 1 March 2001 and 31 March 2017 fall within the older emissions-based VED system and currently pay £20 annually.
This means drivers should check the EV’s registration date rather than assuming every electric vehicle has the same tax bill.
How Has The Expensive Car Supplement Changed In 2026?
The Expensive Car Supplement is an additional VED charge applied to qualifying higher-value cars.
From 1 April 2026:
- Petrol, Diesel And Hybrid Cars: The threshold remains more than £40,000
- Zero-Emission Cars: The threshold is more than £50,000
- Annual Supplement: £440
- Charging Period: Five years from the second vehicle licence
A qualifying vehicle subject to both the £200 standard rate and £440 supplement therefore has an annual VED bill of £640 when paid as a single annual payment.
The EV threshold increase applies to qualifying zero-emission vehicles registered from 1 April 2025. This means many EVs originally priced between £40,001 and £50,000 avoid the additional charge from April 2026.
The threshold is based on the car’s original published list price before first registration and before discounts, not its current used-car value.
A vehicle bought second-hand for considerably less than its original price may therefore still be liable for the supplement while it remains within the charging period.
What Are The 2026 Road Tax Changes For Hybrid Cars?
Hybrid vehicles no longer receive the previous alternative-fuel VED discount.
For cars registered from April 2017, hybrids generally move onto the same £200 standard annual rate as petrol, diesel and electric vehicles after the first payment.
A newly registered hybrid’s first-year charge still depends on its official CO₂ emissions. This means a plug-in hybrid with relatively low emissions can have a much smaller first-year tax bill than a conventional high-emission vehicle.
Higher-priced hybrids can also attract the Expensive Car Supplement. Unlike qualifying zero-emission cars, hybrids continue to use the more than £40,000 list-price threshold.
What Happens To Road Tax When You Buy A Used Car?
Vehicle tax does not transfer automatically to the new keeper when a used car is sold.
A buyer must arrange vehicle tax before using the car on public roads. The previous keeper may receive a refund for any complete remaining months of tax after notifying the authorities that the vehicle has been sold.
Used-car buyers should check:
- Registration Date: This determines which VED system applies
- CO₂ Emissions: Important for vehicles registered under emissions-based bands
- Fuel Type: Diesel and alternative-fuel rules can differ
- Original List Price: Relevant to the Expensive Car Supplement
- Existing Supplement Period: A used car can remain liable even if its resale price is below the threshold
Looking at annual VED before buying can prevent an unexpected ownership cost, particularly with older high-emission vehicles.
How Have Company Car Tax Rates Changed In 2026?
Electric company cars remain relatively low-tax compared with many conventional company cars, but the Benefit-in-Kind percentage has increased.
For the 2026 to 2027 tax year, a zero-emission company car has a 4% appropriate percentage.
Plug-in hybrids producing between 1g/km and 50g/km can have different percentages depending on their electric-only driving range.
Higher-emission vehicles generally attract progressively higher BiK percentages, reaching up to 37%.
For employees, the actual tax payable depends on factors including:
- Car’s Taxable Value
- Applicable BiK Percentage
- Employee’s Income Tax Rate
- Any Employee Contribution
Businesses operating fleets should therefore consider VED and company car tax separately when estimating the total cost of a vehicle.
What Has Been Confirmed About Pay-Per-Mile EV Tax From 2028?
A further major change is planned for 1 April 2028.
Electric Vehicle Excise Duty, known as eVED, will introduce a mileage-based charge for electric and plug-in hybrid cars.
The Government published its consultation response in July 2026 and confirmed the planned introductory rates:
- Battery Electric Cars: 3p Per Mile
- Plug-In Hybrid Cars:5p Per Mile
- Hydrogen Fuel Cell Cars: 3p Per Mile
- Range-Extender Vehicles:5p Per Mile
All UK-registered electric and plug-in hybrid cars within the relevant scope are expected to enter the system from April 2028.
A fully electric car travelling 10,000 miles annually would therefore generate £300 of eVED at the introductory 3p-per-mile rate before considering any future rate changes.
The mileage charge is designed as an extension of the existing VED system rather than a replacement for every current vehicle tax rule.
How Can UK Drivers Prepare For The 2026 Car Tax Changes?
The impact of the 2026 changes varies significantly between vehicles. A driver with a lower-emission older car may see a relatively modest bill, while someone buying a new high-emission vehicle can face several thousand pounds of first-year tax.
Before buying or changing a vehicle, motorists should:
- Check The Registration Date: Different VED systems apply to different registration periods
- Check CO₂ Emissions: This can determine first-year and older-car VED rates
- Confirm Diesel RDE2 Status: Non-compliant diesels can face higher first-year charges
- Check The Original List Price: This determines possible Expensive Car Supplement liability
- Consider Payment Method: Monthly payments can cost more overall
- Check Company Car Tax: Business users should calculate BiK separately
- Plan For Future EV Charges: EV and plug-in hybrid drivers should be aware of eVED from 2028
For drivers in London, VED should also be treated separately from local motoring charges such as ULEZ and the Congestion Charge. Paying road tax does not automatically mean a vehicle is exempt from other applicable charges.
Frequently Asked Questions
Is Car Tax Increasing In 2026?
Yes. From 1 April 2026, the standard annual VED rate for most cars registered from April 2017 increased from £195 to £200. First-year charges and the Expensive Car Supplement also increased.
How Much Is Standard Road Tax In 2026?
The standard annual rate is £200 for most qualifying petrol, diesel, hybrid and electric cars. Paying through 12 monthly Direct Debit instalments costs £210 in total.
How Much Is Road Tax For An Electric Car In 2026?
Electric cars registered from 1 April 2025 pay £10 for their first year and then £200 annually. Electric cars registered between April 2017 and March 2025 generally pay £200, while qualifying EVs registered between March 2001 and March 2017 pay £20.
Which Cars Pay £5,690 Road Tax In 2026?
New cars producing more than 255g/km of CO₂ fall into the highest standard first-year VED band of £5,690. Some non-RDE2 diesel vehicles can also reach the highest first-year rate at a lower emissions level because of the diesel surcharge.
What Is The £50,000 EV Tax Threshold?
From April 2026, qualifying zero-emission cars with an original list price of more than £50,000 can be subject to the £440 annual Expensive Car Supplement. The threshold remains more than £40,000 for petrol, diesel and hybrid cars.
Do Hybrid Cars Pay Road Tax In 2026?
Yes. Hybrids are subject to VED. For many hybrids registered from April 2017, the standard annual rate is £200 after the first tax payment.
When Will Pay-Per-Mile EV Tax Start In The UK?
Electric Vehicle Excise Duty is planned to take effect from 1 April 2028. The introductory rate is set at 3p per mile for battery electric cars and 1.5p per mile for plug-in hybrid cars.
