Road Tax Changes UK: What's Different for 2026/27 and What's Coming Next

Road tax has had another shake-up this year, and if you haven't looked at your VED bill since last April you're in for a surprise. The changes that landed on 1 April 2026 touch almost everyone: petrol and diesel owners, hybrid drivers, and electric car owners who, for the first time in living memory, are now properly inside the tax system rather than sitting outside it. This guide runs through exactly what's changed, what it costs, and what's still to come.

What's changed since April 2026

The government uprates Vehicle Excise Duty every April in line with inflation, and this year was no exception, but 2026 brought more than just the usual nudge upwards. On top of the annual increase, the Expensive Car Supplement threshold for electric vehicles moved, and the gap between EVs and combustion cars narrowed further.

Standard VED rate up to £200

The standard rate of VED from the second year onwards increased from £195 to £200 from 1 April 2026 until 31 March 2027. This applies to the vast majority of cars on the road, and the increase applies across the board to petrol, diesel, hybrid, and electric vehicles once they enter their standard-rate period. It's a modest rise on paper, but multiplied across the country's car parc it adds up to serious money for the Treasury.

Older cars aren't exempt from movement either. Cars registered between March 2001 and March 2017 are taxed on CO2 emission bands rather than the flat rate system introduced later, so what you pay depends on its emissions: the lowest-emitting cars pay around £20 a year while the highest-emitting can pay several hundred pounds. Genuinely old cars still get off lightly: if your car was built more than 40 years ago, it counts as a historic vehicle and is exempt from VED altogether.

Electric cars are now firmly inside the tax system

The bigger story of the last couple of years has been electric vehicles losing their tax-free status. The road tax system changed in April 2025, with electric cars charged VED for the first time. That means 2026/27 is effectively the first full tax year where EV owners across the board are paying to renew, not just new buyers.

There's still a meaningful discount for anyone buying new, though. The standard rate of VED for new EVs registered remains fixed at just £10 until March 2030, so the headline saving on a brand new electric car in year one is real. From year two, however, EVs move onto the same £200 standard rate as everything else.

The Expensive Car Supplement, and the new EV threshold

If you're buying anything with a list price north of £40,000, the Expensive Car Supplement (ECS) is worth understanding properly, because it's an extra annual charge on top of standard VED, not instead of it.

• In 2025/26 the ECS threshold was £40,000 for all cars, but from April 2026 the government increased this threshold to £50,000 if the car is fully zero-emissions.
• The threshold for petrol, diesel and hybrid cars stays put at £40,000.
• For 2026/27, the expensive car supplement itself is £440 a year, payable on top of the standard rate for five years from the second year of registration.

In practice, that higher EV threshold takes a decent chunk of mid-range electric SUVs and family cars out of ECS territory, which had become a genuine sticking point given how many EV models sit above £40,000. It doesn't help anyone buying a premium petrol or diesel car, mind, where the old £40,000 line still applies.

First-year rates: the sharpest rises are for high emitters

First-year VED, sometimes called the showroom tax, is charged when a car is first registered and is scaled steeply by CO2 output. This is where the 2026 changes bite hardest.

• A typical new petrol car emitting around 143g/km now faces a first-year rate of roughly £560.
• A typical new diesel emitting around 164g/km faces roughly £1,360 in year one.
• First-year VED rates for the highest-emitting new cars have risen sharply, with anything over 255g/km CO2 now incurring a first-year charge of £5,690, more than double what it was only a couple of years ago.

That top rate affects dozens of performance and luxury models across the market, so if you're eyeing up something with a big engine, it's worth factoring the first-year bill into your budget before you commit, not after you've signed on the dotted line.

Company car drivers: BiK on electric cars edges up

It isn't just private VED that's moved. From 6th April 2026, the Benefit-in-Kind rate for electric company cars increased from 3% to 4%, which pushes up the tax employees pay on the private use of an electric company car. It's a small step in a longer journey: the rate is set to keep climbing by 1 percentage point a year until 2027/28, then by 2 percentage points to reach 9% in 2029/30. Even with the rise, electric company cars remain far cheaper to tax than petrol or diesel equivalents, where BiK rates typically sit between 25% and 37%.

What's coming next: pay-per-mile for electric cars from 2028

The road tax story isn't finished. A new pay-per-mile charge for electric cars, known as eVED, is confirmed to apply from April 2028, following a government consultation that ran between 26 November 2025 and 18 March 2026 and received more than 5,000 responses. Under the confirmed design, pure electric cars will pay 3p per mile and plug-in hybrids 1.5p per mile, rates set at around half the fuel duty an equivalent petrol driver pays. This sits on top of standard VED rather than replacing it, so it's an additional cost rather than a swap. It's still two years away, so there's nothing to act on today, but it's worth knowing it's coming if you're weighing up how long you'll keep an EV.

What this means if you're buying, selling or just checking your bill

With so many moving parts, the safest thing you can do is check the actual tax status and MOT history of a specific car rather than relying on rules of thumb. Enter a registration number into our reg lookup tool and you'll see its current MOT and tax status straight from the DVLA, plus a free indicative valuation to give you a rough sense of what it might be worth. That valuation is a guide only, useful for a general feel of the market rather than a firm figure to rely on for a sale or an insurance claim, since condition, mileage and spec all move the number around.

If the new Expensive Car Supplement thresholds or the higher first-year rates have you thinking about switching to something newer or cleaner, it's worth weighing up the full cost of ownership, VED included, before you commit. Where funding is part of the picture, you can also be introduced to car finance options, subject to status and affordability, once you've had a chance to see what a car is actually worth and what it'll cost to tax and run. For more on buying sensibly in the current market, our guides section covers the practical side of choosing and running a car.

The bottom line

None of this year's road tax changes are dramatic on their own, a £5 rise here, a threshold shift there, but stacked together they represent a genuine recalibration of who pays what. Electric car owners are no longer exempt, high emitters are paying substantially more up front, and there's a pay-per-mile charge for EVs already confirmed for 2028. Whatever you drive, it pays to check the actual figures for your specific car rather than assuming last year's numbers still apply, because in this area of motoring, they rarely do for long. For the full official rate tables, the GOV.UK vehicle tax pages are kept current and are worth a look before you tax any car.