New Car Tax Rates Take Effect Next Week: Some Drivers Face £5,690 Bills
The majority of UK motorists will see their Vehicle Excise Duty bills rise from April 1, 2026, as new car tax rates are confirmed. These changes signal higher costs for drivers across the country, with some facing charges as steep as £5,690 in the first year alone.
Standard Annual Rate Increases
According to official figures from Gov.uk, cited by Confused.com, the standard annual rate for most new petrol and diesel vehicles will increase to £200 from £195 in the 2025/26 tax year. This adjustment applies after the first year of ownership, affecting a broad swath of motorists.
Zero-emission vehicles, which have enjoyed lower rates, will now pay £10 in their first year, followed by the standard £200 rate in subsequent years. This shift reflects evolving policies towards electric and low-emission transportation.
First-Year Tax Hikes Based on CO2 Emissions
The first year's tax for all vehicles has seen significant increases, with rates directly tied to CO2 emissions. The highest band, for vehicles emitting over 256g/km, now stands at a staggering £5,690—a £200 rise from the previous year.
This tiered system means that the more a vehicle pollutes, the steeper the tax burden becomes. The 2026/27 rates for vehicles registered on or after April 1, 2026, are as follows:
- 0g/km: £10
- 1-50g/km: £115
- 51-75g/km: £135
- 76-90g/km: £280
- 91-100g/km: £365
- 101-110g/km: £405
- 111-130g/km: £455
- 131-150g/km: £560
- 151-170g/km: £1,410
- 171-190g/km: £2,270
- 191-225g/km: £3,420
- 226-255g/km: £4,850
- 256+g/km: £5,690
It is important to note that prices may vary for diesel vehicles meeting Real Driving Emissions (RDE) standards. After the first year, vehicles typically transition to the annual standard rates.
Additional Charges for High-Value Vehicles
High-value vehicles priced above £40,000 face additional charges for up to five years. Currently, this supplementary amount is set at £440 annually. For zero-emission cars, this threshold increases to £50,000 from April 1, 2026, offering some relief to electric vehicle owners in the luxury segment.
Rates for Older Vehicles
Vehicles registered between March 1, 2001, and April 1, 2017, have their Vehicle Excise Duty determined by CO2 emissions under a different banding system. The 2026/27 rates for these cars are:
- Band A (up to 100g/km): £20
- Band B (101-110g/km): £20
- Band C (111-120g/km): £35
- Band D (121-130g/km): £170
- Band E (131-140g/km): £200
- Band F (141-150g/km): £225
- Band G (151-165g/km): £275
- Band H (166-175g/km): £325
- Band I (176-185g/km): £360
- Band J (186-200g/km): £410
- Band K (201-225g/km): £445
- Band L (226-255g/km): £760
- Band M (over 255g/km): £790
Band K specifically applies to cars with CO2 emissions exceeding 225g/km that were registered before March 23, 2006. Drivers uncertain about their vehicle's band should consult the GOV.UK website for clarification.
Exemptions and Important Notes
Certain vehicles qualify for Vehicle Excise Duty exemption. These include:
- Vehicles over 40 years old
- Vehicles used by individuals with eligible disabilities
- Vehicles operated by organisations providing transport for people with eligible disabilities
- Agricultural vehicles
- Vehicles with a Statutory Off-Road Notice (SORN) attached
However, it is crucial to emphasize that all vehicles must still be taxed, even if that tax is free of charge. Failure to comply can result in penalties, so drivers should ensure their vehicles are properly registered and taxed according to the new rates.
As these changes take effect next week, drivers are advised to check their specific tax obligations to avoid unexpected bills and ensure compliance with the updated regulations.
