Vehicle Excise Duty Hike Threatens Motorists and Hauliers — Who Pays First and How Much It Will Cost

Mo. Basuony

Published: February 23, 2026 6:48 AM ET

Vehicle Excise Duty Hike Threatens Motorists and Hauliers — Who Pays First and How Much It Will Cost

The immediate impact falls unevenly: private motorists buying high-emission cars and hauliers running heavy trucks will feel the first sting when Vehicle Excise Duty rises hit from April 1, 2026. New first-year bands, diesel penalties tied to RDE2 compliance, and a separate uprating of HGV VED in line with inflation mean some buyers could face five-figure bills, while fleet operators confront stacked cost pressures that stretch beyond tax alone.

Who is affected first — drivers, hybrids, electric owners and haulage fleets

Here’s the part that matters: drivers registering polluting cars, diesel owners of older vehicles, and HGV operators face the earliest and clearest cost increases. Labour confirmed first-year car rates will change from April 1, 2025, with zero-emission cars paying a first-year rate of £10 until 2029-2030 and vehicles emitting 1–50g CO2/km, including hybrids, set to pay £110 in their first year. By contrast, the most polluting cars have already had their first-year charges ballooned into the thousands.

For hauliers, Vehicle Excise Duty for HGVs will be increased in line with the Retail Price Index from 1 April this year, adding to a bill that for a 44 tonne truck is currently £1, 643 for 2025/26. That rise coincides with an annual uptick in the HGV Levy, creating an immediate squeeze on operating costs.

Vehicle Excise Duty: key rate changes and notable bands

The headline changes for cars and light vehicles include uprating in line with inflation from April 1, 2026, and earlier first-year rate changes taking effect from April 1, 2025. Selected rate details in the coverage include:

Zero-emission cars: first-year rate of £10 until 2029-2030.
1–50g CO2/km band (including hybrids): first-year charge of £110.
76–90g/km bracket: prior first-year charge noted at £270; higher-emission bands have been pushed sharply higher, with the most polluting cars in recent changes reaching £5, 490.
With the inflation-linked rise, first-year bills for the most polluting vehicles could reach £5, 690.
151–170g/km band: rising from £1, 360 to £1, 410.

Certain diesel cars face additional uplifts if they do not meet the Real Driving Emissions 2 (RDE2) standard for nitrogen oxide emissions. Diesel vehicles that fail RDE2 will pay higher VED if they emit between 1 and 255g/km, with rates equalised at emissions above 255g/km.

HGVs and haulage: stacked costs and parliamentary warnings

Ministers and MPs have flagged that the HGV uprating will come at a difficult time for the logistics sector. The tax applies across vehicle types used in haulage — 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 — and it will be uprated from 1 April this year.

Shadow Exchequer Secretary James Wild raised concerns in scrutiny of the Finance Bill about the timing of the increases and the absence of targeted support for the most affected industries, particularly logistics. He highlighted that Vehicle Excise Duty for HGVs already uses more than 80 different rates that vary by weight, emissions, class and configuration, and warned operators face rising business rates, higher fuel duties and increased employment and transport taxes alongside this tax change.

Research cited in the discussion estimates fuel duty adds more than £2, 000 a year to the cost of operating a single HGV and amounts to roughly £435m in additional costs across the sector. The logistics sector contributes substantial gross value added and employment — figures referenced in the debate put that contribution at £170bn in gross value added and about 8% of the workforce.

Fuel duty schedule and transitional pressures

Hauliers are also facing a staged schedule of fuel duty rises: an extra 1p per litre on 1 September this year reversing a temporary 5p-per-litre cut introduced in 2022; then a 2p-per-litre rise on 1 December; another 2p-per-litre rise on 1 March 2027; and from April 2027 fuel duty will again rise in line with RPI. Those steps amplify the effect of VED uprating for truck operators.

Signals and short checklist for affected parties

Electric and hybrid drivers: pay-per-mile charges are set to begin in 2028, adding a new cost dimension beyond VED.
Car buyers considering high-emission models: first-year bills for the worst polluters have already been pushed into the multiple-thousands and may reach £5, 690 after inflation uprating.
Diesel buyers: check RDE2 compliance; non-compliant models face higher VED if they emit between 1 and 255g/km.
Hauliers: expect VED increases from 1 April and layered fuel duty rises from 1 September onward; current 44 tonne VED for 2025/26 stands at £1, 643.

What’s easy to miss is how these changes interact: fuel duty, the HGV Levy and VED uprating together increase marginal operating costs in ways that are harder to absorb than a single headline tax rise.

Note on the wider coverage: a recent roundup of expected Vehicle Excise Duty changes collected the bands and figures set to take effect from April 1, 2026, and a separate short headline in the material read "Verifying Device" — unclear in the provided context what that refers to.