Some motorists will be charged as much as £225 to use the road under new Vehicle Excise Duty (VED) car tax rules introduced by Rachel Reeves. The Chancellor has overseen major updates to VED tax bands from April 1, with fees up across the board for petrol, diesel and electric car owners.
Among those affected by the new updates are motorists holding the keys to cars registered between 2001 and 2017. Drivers in this category are placed in one of 13 car tax bands, with fees adjusted on a sliding scale based on vehicle emissions.
Cars in band F, emitting between 141 and 150g/km of CO2, will pay £225 to get behind the wheel over the 2026/27 tax year. This is a £10 increase on the £215 fee paid by motorists falling into band F before the updates introduced in April.
Motorists in this category were paying just £210 per year to use the roads over the 20234/25 tax year, with charges increasing every 12 months. Cars in this category tend to be petrol- or diesel-powered family SUVs, crossovers, or sporty hatchbacks.
VED fees increase every year in line with Retail Price Index (RPI) inflation, and 2026 is no different. VED rates rise to ensure the tax receipts paid by road users retain their real-terms value.
However, discounts are usually offered for electric vehicles to encourage the adoption of cleaner models. Drivers must ensure their vehicles are taxed before getting behind the wheel of their cars, with fines in place for road users who do not comply.
Motorists can renew their vehicle tax online in minutes, with fees paid upfront once per year or through instalments.
However, the new tax rises are set to be a major blow to owners already grappling with the rising cost of car ownership as fuel costs soared over March and April.
The RAC said: “VED road tax rates for cars first registered after March 2001 and before April 2017 are split across 13 bands depending on the CO2 emissions of the vehicle. In basic terms, the lower the CO2, the lower the tax band.
“Road tax for petrol and diesel cars registered after March 2001 and before April 2017 is broadly the same.”