UK Car Tax Changes 2026 – How Much VED Is Rising and Which Vehicles Are Affected?
• February 2, 2026
As a UK motorist, I’ve been closely following the upcoming 2026 car tax changes, and frankly, the scale of the updates is significant. If you’re driving an older car or planning to purchase a new one, you need to understand what’s coming, particularly around Vehicle Excise Duty (VED). The increases aren’t just about top-end cars anymore, even average family vehicles in London and beyond are affected.
Here’s what you need to know right away:
- VED rates are increasing sharply from April 1, 2026
- First-year rates on new petrol/diesel cars can hit £5,690
- Older high-emission cars are being scrapped due to unaffordable taxes
- Electric Vehicles (EVs) will start paying VED from 2026
- A mileage-based tax for EVs begins in 2028
Let’s dive deeper into what this means for UK drivers.
Why Is the UK Government Introducing Major Car Tax Changes in 2026?
The UK government is introducing sweeping car tax changes in 2026 to accelerate the shift towards cleaner transportation. Central to this move is a stronger financial distinction between zero-emission electric vehicles (EVs) and traditional petrol or diesel cars.
Chancellor Rachel Reeves emphasised that the changes are designed to:
- Encourage consumers to adopt electric vehicles
- Penalise high CO2-emitting models with significantly higher first-year Vehicle Excise Duty (VED)
- Support climate targets by phasing out older, polluting vehicles
With London’s Ultra Low Emission Zone (ULEZ) already enforcing strict emission rules, these national changes are in alignment with broader environmental goals.
“To help drive the transition to electric vehicles, the government is strengthening incentives to purchase EVs by widening the differentials in VED.” – Chancellor Rachel Reeves
The government is also addressing lost fuel duty revenue from EVs, setting the stage for a new mileage-based tax system from 2028.
What Are the Key Changes to Vehicle Excise Duty (VED) in 2026?
Vehicle Excise Duty (commonly referred to as car tax or road tax) is rising across the board in 2026. The aim, according to Chancellor Rachel Reeves, is to push drivers towards electric vehicles while penalising high-emission petrol and diesel cars.
VED Rate Increases – What’s New?
From 1 April 2026, all cars will be taxed based on tailpipe emissions and value, with significant hikes in both first-year and annual rates for higher-emission models.
2026 First-Year VED Rates Based on Emissions:
| CO₂ Emissions (g/km) | 2025 Rate (£) | 2026 Rate (£) |
|---|---|---|
| 0 | £10 | £10 |
| 1–50 | £110 | £115 |
| 51–75 | £130 | £135 |
| 76–90 | £270 | £280 |
| 91–100 | £350 | £365 |
| 101–110 | £390 | £405 |
| 111–130 | £440 | £455 |
| 131–150 | £540 | £560 |
| 151–170 | £1,360 | £1,410 |
| 171–190 | £2,190 | £2,270 |
| 191–225 | £3,300 | £3,420 |
| 226–255 | £4,680 | £4,850 |
| Over 255 | £5,490 | £5,690 |
These rates are only for the first year. After that, most cars will pay the standard rate of £200 annually (up from £195). Vehicles over £40,000 (or £50,000 for EVs) will attract an additional £425 “luxury car” supplement for five years.
Which Cars Will Be Most Affected by the New VED Rates?
The impact will be widespread, but especially severe for owners of older, higher-emission vehicles, including many previously popular family models.
Real-World Example: Family Cars Facing the Axe
I spoke to a dealer in Kent who told me:
“We’ve stopped stocking models like the Ford Mondeo V6 – nobody wants to pay £760 a year just to keep it on the road. It’s not about luxury, it’s about affordability.”
These aren’t exotic cars, they’re the kind you see parked on every other street in London and beyond. Yet they’re becoming financially unsustainable.
Cars Facing VED Charges of £735–£790 from April 2026
| Model | New Annual VED (£) |
|---|---|
| Saab 900 Convertible | £760 |
| Land Rover Freelander 2 i6 | £760 |
| Audi TT 1.8T | £760 |
| Ford Galaxy 2.3 | £760 |
| Jaguar X-Type Auto | £760 |
| Subaru Forester 2.5 XT | £760 |
| Volkswagen Golf R32 | £760 |
| Chrysler PT Cruiser | £760 |
| Vauxhall Zafira VXR | £760 |
| Ford Mondeo V6 | £760 |
Many of these vehicles are either being scrapped or exported because their VED now rivals or exceeds their resale value.
What Is the Full List of 59 Cars Affected by the New VED Hike?
The government has released a comprehensive list of 59 cars that will face the £5,690 first-year tax from April 2026. This includes vehicles across multiple classes and performance categories, with some surprising entries that affect everyday consumers, not just supercar enthusiasts.
Below is the complete list of vehicles facing the £5,690 first-year car tax from April 2026:
59 Cars Affected by the £5,690 First-Year VED (2026)
| Manufacturer | Model(s) |
|---|---|
| Audi | RS6, RS7, R8, SQ7, SQ8, Q7 V8 |
| BMW | X5 M, X6 M, M5, M8, Alpina B5 |
| Ford | Ranger 3.0 V6, Mustang 5.0 V8, Raptor |
| Toyota | Land Cruiser V8, Hilux 2.8D |
| Mercedes-Benz | GLE63, GLS63, AMG G63, S63 AMG, AMG GT Coupe, G-Class V8, SL63 AMG, Maybach GLS |
| Porsche | 911 Turbo, 911 Carrera GTS, Macan 2.9T V6, Cayenne Turbo, Cayenne Coupe Turbo GT |
| Land Rover / Range Rover | Defender V8, Defender 5.0 V8, Range Rover Sport 4.4 V8, Range Rover 5.0 V8, Velar V8, SVAutobiography, Autobiography Dynamic, Sport SVR |
| Jeep | Grand Cherokee Trackhawk, Wrangler Rubicon V8 |
| Maserati | Levante Trofeo, Quattroporte GTS, Ghibli Trofeo |
| Ferrari | Portofino M, Roma, F8 Tributo |
| Lamborghini | Urus, Huracán, Aventador |
| Aston Martin | DB11, DBS Superleggera, Vantage V8 |
| Jaguar | F-Type 5.0 V8, XJR575, XF SVR |
| Bentley | Continental GT, Flying Spur V8, Bentayga V8 |
| Rolls-Royce | Wraith, Ghost, Cullinan |
These vehicles are subject to the tax due to their high CO₂ emissions and, in many cases, high list prices. Interestingly, many of these models also face the £425 annual “Expensive Car Supplement” for five years post-purchase.
This list reflects a decisive push to influence car-buying behaviour, especially in affluent areas like London, where these premium models are common.
How Will Older Cars Registered Between 2001 and 2017 Be Affected?
If you own a car registered between March 2001 and April 2017, you’re not exempt from the 2026 tax hikes. The government is adjusting annual VED rates based on CO₂ emissions, hitting older models still in regular use.
Key changes to note:
- Vehicles emitting 226-255g/km will see tax rise from £735 to £760
- Those emitting over 255g/km will jump from £750 to £790
- Other bands will also see £10-£25 increases across the board
Here’s an example of how this impacts typical models still on UK roads:
A 2005 Volkswagen Golf R32 will attract £760 per year, while a Ford Mondeo V6 will incur £735-£760, depending on registration and engine specs.
This shift has already led to mass scrappage of older family cars whose tax bills rival their market value.
As Wayne Lamport, a Kent-based car dealer, told The Telegraph:
“A Jaguar X-Type might only be worth £1,000, but its tax is over £700. That math doesn’t work for buyers anymore.”
What Are the Changes to the “Luxury Car Tax” and How Do They Impact EVs?
The Luxury Car Tax, officially the Expensive Car Supplement, is also being tweaked. As of April 2026, this additional £425 annual tax will continue to apply to vehicles with a list price over £40,000, except for one crucial change: Electric Vehicles (EVs) now have a higher threshold.
Here’s what’s changing:
- Petrol/Diesel/Hybrid vehicles: Still taxed above £40,000
- EVs: Threshold rises to £50,000
- The £425 charge applies from years 2 to 6, totalling £2,125 extra
This provides some relief for EV buyers, especially those choosing mid-range models that previously hovered just over the limit. For instance, a £48,000 electric SUV like the Hyundai Ioniq 5 would now escape this penalty, whereas a similarly priced petrol SUV would not.
This move is intended to incentivise EV uptake without disproportionately taxing mainstream electric cars, particularly in London, where EV ownership is growing rapidly due to cleaner air policies.
What Will Change for Electric Vehicle Owners in 2026 and Beyond?
From 2026, the tax advantages long enjoyed by electric vehicle (EV) owners will come to an end as the UK government reshapes how road tax is applied. From April 2026, EVs will no longer be exempt from Vehicle Excise Duty (VED). Instead, owners will pay a £10 first-year rate followed by a standard £200 annual charge, bringing EVs closer in line with petrol and diesel cars.
Higher-value EVs priced above £50,000 will also become subject to the Luxury Car Tax, increasing ownership costs further. Looking ahead, a new pay-per-mile road tax is planned from April 2028 for EVs and plug-in hybrids. Proposed rates are 3p per mile for EVs and 1.5p for plug-in hybrids, meaning drivers covering 10,000 miles a year could pay around £300 annually.
As one industry expert noted:
“EV drivers who thought they’d escape long-term tax burdens may need to rethink their budgeting.”
How Can UK Drivers Prepare for the 2026 VED Reforms?
Navigating the upcoming 2026 car tax changes will require UK drivers to reassess their motoring budgets, vehicle choices, and usage habits. Whether you’re buying a new car, hanging onto an older one, or transitioning to electric, preparation is key.
Here’s how you can start planning:
- Review your car’s CO₂ emissions and expected VED band
- Consider whether your car falls under the Luxury Car Tax threshold
- Calculate long-term ownership costs, including future mileage tax for EVs
- For Londoners, factor in ULEZ, congestion charges, and these national taxes
- If you’re planning a new purchase in 2025-2026, evaluate total tax liability, not just the sale price
For some, it may make financial sense to keep an older car running, especially if it’s taxed on engine size alone and well-maintained. Others may benefit from switching to a tax-efficient EV before rates shift again.
By taking a proactive approach now, you can avoid the financial shock that many motorists may face come April 2026.
Conclusion
As someone who’s watched car tax policy shift over the years, I can say the 2026 changes are among the most far-reaching yet. Whether you drive a decade-old diesel, a brand-new EV, or something in between, there’s no avoiding the cost implications.
Personally, I’m weighing whether to hold onto my older car a little longer, or finally go electric. But with the incoming mileage tax and expensive car supplement, even that feels less clear-cut.
Whatever your decision, being informed is key. And if you’re in London like me, planning ahead isn’t optional, it’s essential.
FAQs About Car Tax Changes 2026
Will electric cars still be tax-free in 2026?
No. From April 2026, EVs will start paying the standard annual VED of £200, and those over £50,000 will pay an extra £425 annually.
What is the “luxury car tax”?
It’s an additional £425/year applied to cars costing over £40,000 (£50,000 for EVs) for five years starting from year two of ownership.
Is there a way to avoid paying high VED?
Choose a car with low CO₂ emissions or consider buying before April 2026 to lock in lower tax rates.
Will ULEZ charges increase with VED?
ULEZ is separate from VED, but combined, they increase the total cost of driving in London significantly.
What happens to classic cars over 40 years old?
They remain exempt from VED under the ‘historic vehicle’ category.
How is car tax enforced without a tax disc?
ANPR cameras and the DVLA database track untaxed vehicles. Penalties for non-payment can exceed £1,000.
Will the mileage-based EV tax increase every year?
Yes. It will rise annually with the Consumer Price Index from 2028 onward.
