Chancellor Rachel Reeves has rolled out updated Vehicle Excise Duty (VED) bands, impacting nearly all motorists with higher road tax rates. Effective from April 1, 2026, these changes raise costs for most petrol, diesel, and electric vehicle owners across various models.
Van Drivers Hit with Steepest Increases
Van owners face the sharpest hikes, paying up to £360 annually. HM Revenue and Customs (HMRC) data shows early Euro 4 and Euro 5 compliant vans registered after March 2001 stay at £140 per year, matching prior rates.
All other vans see fees climb from £345 to £360 for the 2026/27 tax year—a larger jump than last year’s rise from £335 to £345.
Car Owners See Varied Tax Band Adjustments
Cars registered after 2017 now cost £200 yearly to tax. Brand new vehicles reach up to £5,690 per year, while models from 2001 to 2017 slot into one of 143 bands, with top rates at £790 annually.
RPI-Linked Inflation Drives Annual Rises
These VED adjustments follow Retail Price Index (RPI) inflation, applied each spring. HMRC stated: “As announced at Budget 2025, the Government will introduce legislation in Finance Bill 2025-26 to uprate Vehicle Excise Duty rates for cars, vans and motorcycles in line with the Retail Price Index (RPI) for 2026 to 2027. This will take effect from April 1, 2026.”
