April 2026 Car Tax Changes: What UK Drivers Need to Know About UK Vehicle Excise Duty

Published by Farazia Gillani posted in Automotive and Transportation, Taxes on 4 March 2026

From 1 April 2026, many motorists will pay more UK vehicle excise duty (VED). The increase is inflation-linked and applies across several parts of the system, not only the “headline” band for the highest CO₂ cars.

For most people, the change is modest. For buyers of brand-new, high-emission cars, the first-year bill can be eye-watering. And for electric vehicle owners, there is still tax to pay, even if the first-year rate stays low.

Also Read: Van Tax Changes and How they Affect Employer Vehicle Costs

Car Tax Changes on 1 April 2026

Area	What changes from 1 April 2026	Why it matters
Standard rate (most cars registered after April 2017, years 2+)	£195 → £200	Small rise for many drivers
Top first-year CO₂ band (new cars over 255 g/km)	£5,490 → £5,690	Up to £200 extra in year one for top emitters
Expensive Car Supplement (ECS) amount	£440 per year (years 2–6)	Extra cost on top of standard rate for expensive cars
ECS threshold for zero-emission cars	£40,000 → £50,000 (rule takes effect 1 April 2026)	Helps many EVs avoid the ECS if priced between £40k–£50k

How VED Works

For cars first registered on or after 1 April 2017, VED is usually split into two parts:

First-year rate (based on CO₂ emissions)
Standard rate (a flat annual rate from year two onwards)

On top of that, some cars pay the Expensive Car Supplement for five years (years 2–6).

For cars registered between 1 March 2001 and 31 March 2017, VED follows a different CO₂ band table and does not work the same way as the post-2017 system.

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The Big Headline: Higher First-Year Bills For High-Emission New Cars

If you are buying a new petrol or diesel car with very high CO₂ emissions, the first-year “showroom tax” can be the biggest cost shock.

For cars emitting over 255 g/km, the first-year rate rises to £5,690 from 1 April 2026. That is £200 more than the 2025–26 level.

This matters most if you are:

Buying a high-performance model
Buying a heavy SUV or large engine vehicle with high CO₂
Registering a brand-new vehicle close to the April changeover date

Read: VAT on Car Hire in the UK – What Businesses Need to Know

What About UK Vehicle Excise Duty on Electric Vehicles In 2026?

Electric cars are no longer fully exempt from VED. Under the rules that came in from 1 April 2025, new zero-emission cars pay a £10 first-year rate, and then pay the standard rate afterwards.

From 1 April 2026, that standard rate becomes £200 (up from £195).

There is also a helpful change for many EV buyers: the government is increasing the Expensive Car Supplement threshold for zero-emission cars to £50,000, effective 1 April 2026, for eligible vehicles registered from 1 April 2025 onwards.

Practical takeaway: an EV priced at £45,000 may avoid the ECS once the new threshold applies, while a petrol or diesel car still faces the £40,000 threshold.

VED For Older Cars (Registered 2001 To 2017): Rates Rise Too

If your car was registered between 1 March 2001 and 31 March 2017, your annual VED is still based on CO₂ bands.

Here are the top-end bands for 2026–27:

Band (2001–2017 system)	CO₂ emissions	Standard rate from 1 April 2026
L	226–255 g/km	£760
M	Over 255 g/km	£790

Planning Tips For Households And Businesses

Small increases add up, especially for fleets. A few sensible checks can protect cash flow.

If you are ordering a new car, confirm the official CO₂ figure and expected first-year VED before you sign.
If you run a fleet, build the new rates into your 2026–27 budgets and forecasts.
If you are considering an EV, check the list price carefully and whether the £50,000 ECS threshold will apply to your licence date.
Keep records tidy. For business vehicles, VED is typically treated as a running cost in the accounts, so clean bookkeeping helps your year-end work and reporting.

How We Can Help You Plan For Upcoming Car Tax Changes in UK

At Apex Accountants, we help drivers and businesses understand how motoring costs affect tax, budgeting, and cash flow.

Our support can include:

Fleet cost forecasting and budgeting reviews
Bookkeeping clean-up for vehicle and mileage records
Company structure and cost planning for vehicle-heavy businesses
Management reporting so you can track motoring costs month by month

Get Free Consultation

Call Anytime 0203 883 4777

Get Free Consultation

Conclusion

The April 2026 updates to UK vehicle excise duty are not a single “one-off” change. They raise the standard annual rate, increase first-year charges for the highest CO₂ cars, and adjust how the expensive car rules apply to many EVs.

If you want help modelling the cost impact for your household or fleet, contact Apex Accountants for a practical review and clear next steps.

FAQs About UK Road Tax

1. Is car tax rising for electric vehicles?

Yes. Since April 2025 EVs lost their tax exemption. A new EV now pays £10 in its first year and then £200 per year. However, EV buyers get a higher luxury threshold: if the car’s list price is under £50,000, the extra £425 tax doesn’t apply.

2. How does the luxury tax change?

The Expensive Car Supplement (also called luxury car tax) stays at £425 per year, but now only applies above £40k list price for petrol/diesel cars, and above £50k for EVs. This means many £40–£50k EVs bought since April 2025 are now exempt from the extra fee.

3. What about car tax on diesel cars?

Most diesel models follow the same bands as petrol. However, non-RDE2 compliant diesels still pay one band higher (up to £5,490 in 2025). The 2026 update likely maintains that rule.

4. What about car tax on Older cars (pre-2001)?

These are taxed by engine size. The 2026 rates (via RPI) are modest: e.g. £220 for 12 months on a small petrol car. For cars from 2001–2017, old CO₂ bands now have even the cleanest cars at £20 (no free road tax any more).

5. How to pay UK road tax & check?

You can pay or renew online via GOV.UK. Input your reg to see the exact VED due. If unsure, consult a tax professional for advice on company cars or vehicle financing, as these changes can affect tax planning.