Vehicle Tax rises, ‘26’ plates and new charges set to hit drivers this spring

The Government will raise vehicle tax and related charges that take effect this spring, with Vehicle Excise Duty set to rise from April 1, 2026 and a cluster of rule changes beginning from March 1, 2026 that could add hundreds — or in some cases thousands — to running costs.

VED hikes from April 1, 2026 follow Autumn Budget changes

Chancellor Rachel Reeves unveiled new car tax rates in the recent Autumn Budget and confirmed that Vehicle Excise Duty for cars, vans and motorcycles will rise in line with the Retail Price Index from the new financial year on April 1, 2026. The change follows earlier moves by the Chancellor to "widen the differentials" between internal combustion engine vehicles, hybrids and electric cars.

What drivers will pay in first year and high-emission bands

Labour confirmed VED first year rates would change from April 1, 2025, with zero-emission cars paying a first-year rate of just £10 until 2029-2030 and modest increases for vehicles emitting between 1 and 50g of CO2 per kilometres. Vehicles in that 1–50g/km band, including hybrids, would pay £110 in the first year of registration. Cars in the 76–90g/km bracket previously charged £270 have faced a jump, with the most polluting vehicles moved to a £5, 490 band; with the inflation-related rise, some motorists could pay as much as £5, 690 in the first year.

Vehicle Tax standard rate and the £200 flat fee for many cars

The standard rate of vehicle tax for most cars is expected to rise by £5 to £200, affecting the majority of vehicles first registered after 2017. That £200 figure is expected to apply as a flat annual rate in April 2026 for many newer cars, and electric vehicle owners — who became liable for VED last year — will also see the £200-a-year flat rate applied.

Number plates, renewals and the ‘26’ registration change

From March 1, 2026, all new cars registered will carry a "26" plate, and cars with number plates from 17 and 67 upwards will be subject to the standard-rate increase. The Driver and Vehicle Licensing Agency will issue letters to households when a renewal is due. Newer cars may attract lower initial rates, while vehicles first used before 2017 may pay less or more depending on their band.

Diesel rules, emissions tests and luxury charges

Certain diesel drivers face higher charges if their vehicles fail to meet the Real Driving Emissions 2 (RDE2) standard for nitrogen oxide emissions. Diesel cars that do not meet RDE2 will have higher prices than other diesel vehicles if they emit between 1 and 255g/km, with rates equalised when emitting more than 255g/km. Separately, if a vehicle had a list price exceeding £40, 000 when first sold — or £50, 000 for electric cars — the "luxury car tax" adds £425 a year, taking annual VED to £620 for those vehicles.

Costs by CO2 band and projected revenue

Specific band changes already signalled include a rise for 151–170g/km from £1, 360 to £1, 410 and for 171–190g/km from £2, 190 to £2, 270. The Office for Budget Responsibility forecasts that VED will raise £9. 1 billion in 2025/26, representing 0. 3% of national income.

March rule changes, the expensive car supplement and insurance timing

March also brings a set of rule changes affecting buyers and company car users. Motoring expert Steve Ramsey of Go Compare warned that the "expensive car supplement" cliff edge means that if a car’s list price is over £40, 000 you will pay an extra £410 at current rates for each of the next five years — more than £2, 000 extra compared with a car with a list price of £39, 995 — and that the list price, not the price paid, determines the charge. For electric cars, the expensive car supplement threshold rises to £50, 000 from the start of April. Ramsey also noted that if you buy insurance on the same day your car is delivered you will pay nearly 40% more than if you had obtained a quote 26 days earlier.

Payments, Advisory Fuel Rates and DVLA rules

HM Revenue & Customs administers VED and the DVLA enforces tax and number-plate rules. Drivers can spread VED payments by Direct Debit monthly, six-monthly or annually; paying annually is slightly cheaper because other methods carry a surcharge. HMRC also updates Advisory Fuel Rates each quarter, including in March, and those AFRs are used to calculate tax-free employee mileage reimbursements for company cars. Ramsey advised keeping accurate daily logs of business miles because if your employer reimburses at a rate different from the AFR your tax position can change and you could face a surprise bill.

Enforcement: plates, fines and police checks

Number plates must follow strict DVLA rules or drivers can lose their registration, face a £1, 000 fine and fail their MOT. Police have ramped up checks on cloned plates and illegal spacing. A quoted remark about company car benefit-in-kind tax in the provided material is unfinished and unclear in the provided context.

Next on the calendar: the new registration "26" plate takes effect on March 1, 2026; VED first-year changes take effect from April 1, 2025 and the inflation-linked VED rises begin on April 1, 2026; electric and hybrid drivers should note plans for pay-per-mile charging from 2028 and HMRC will publish its March Advisory Fuel Rates update ahead of the spring changes.