Vehicle Excise Duty rises from April prompt MPs’ warning and steep car charges

The government will raise vehicle excise duty in line with the Retail Price Index from April 1, 2026, a move that pushes up car tax costs and has prompted MPs to warn that hauliers and drivers face new financial pressure.

Vehicle Excise Duty to rise for cars, vans and motorcycles from April 1, 2026

Chancellor Rachel Reeves unveiled new car tax rates in the Autumn Budget that confirm vehicle excise duty for cars, vans and motorcycles will be uprated in line with RPI from the new financial year on April 1, 2026. The Budget also set out controversial plans for a pay‑per‑mile system for electric cars and hybrids starting in 2028.

First‑year rates, big jumps for high‑emission cars

Labour confirmed a separate change to first‑year VED rates taking effect from April 1, 2025: zero‑emission cars will pay a first‑year rate of £10 until 2029‑2030, while vehicles emitting between 1 and 50g of CO2 per kilometre will pay £110 in the first 12 months after registration. Cars that emit more than 76g/km saw charges double in an earlier change, with the most polluting vehicles facing a £5, 490 first‑year bill; after the planned inflation‑related rise, motorists buying those high‑emission cars could face as much as £5, 690.

Diesel rules, OBR forecast and sample bands

Certain diesel drivers will pay more if their vehicles do not meet the Real Driving Emissions 2 (RDE2) standard for nitrogen oxide. Diesel cars that fail RDE2 and emit between 1 and 255g/km will face higher VED rates, with rates equalised only when emissions exceed 255g/km. The Office for Budget Responsibility forecasts that VED will raise £9. 1 billion in 2025/26, representing 0. 3% of national income. Example bands flagged for 2026 include the 151–170g/km band rising from £1, 360 to £1, 410 and the 171–190g/km band rising from £2, 190 to £2, 270.

MPs warn HGV increases will hit hauliers hard

Ministers and MPs have raised concerns about a parallel increase to HGV VED set to take effect on 1 April. The planned uplift will apply in line with RPI and affects vehicles such as rigid trucks without trailers and tractive units, the cab of an articulated lorry, rigid goods vehicles with trailers, vehicles with exceptional loads and haulage vehicles other than showman’s vehicles. For 2025/26, the annual VED for a 44‑tonne truck is £1, 643; this uprating will be the first hike since the tax was frozen in 2014 and will coincide with an annual rise in HGV Levy rates on 1 April.

Industry costs, fuel duty timeline and parliamentary pressure

Shadow Exchequer Secretary James Wild raised the timing and scale of the increases at a meeting scrutinising the Finance Bill, warning that "HGV vehicle excise duty is already complex, with more than 80 different rates, varying based on the characteristics of weight, emissions, class and configuration. " He said the decision to uprate vehicle excise duty for HGVs and the levy comes at a tough time, citing cost pressures from rising business rates, higher fuel duties and increased employment and transport taxes. He pointed to research from the RHA that estimates fuel duty adds more than £2, 000 a year to the cost of operating a single HGV, amounting in total to about £435 million in additional costs for the sector; he added that the logistics industry adds £170 billion in gross value added and employs around 8% of the workforce.

Fuel duty increases and decarbonisation concerns

Hauliers face a scheduled series of fuel duty rises: an extra 1p per litre on 1 September this year (reversing a temporary 5p cut introduced in 2022), a 2p per litre rise on 1 December, a further 2p on 1 March 2027, and from April 2027 fuel duty will again rise in line with RPI. MPs pressed ministers on what assessment has been made of the increases' impact on the sector’s ability to invest, be efficient, grow and decarbonise, noting warnings that the measures could stall decarbonisation without fiscal support for transitional low‑carbon fuels such as hydrotreated vegetable oil and without extending full expensing to higher bands.

Other items in the brief and next steps

A separate item titled "Verifying Device" from The Sun appears in the provided context but contains no accompanying text; unclear in the provided context. Political and industry deadlines now ahead include the change to first‑year VED rates from April 1, 2025, the uprating of vehicle excise duty for cars, vans and motorcycles from April 1, 2026, the HGV VED and HGV Levy rises taking effect on 1 April, and the staged fuel duty increases beginning on 1 September. Parliament will consider the Finance Bill clauses that enact these measures in the coming weeks.