Vehicle Tax Rises and March Rule Changes Set to Hit Drivers with Steep New Bills
MPs and motorists are facing a wave of changes to vehicle tax that begin in March and deepen in April, with direct costs tied to emissions bands, diesel compliance and an ‘expensive car supplement’ that can add thousands to ownership bills. The timing forces buyers to weigh registration dates, list prices and insurance timing against new charges that start in the coming weeks.
Rachel Reeves and Vehicle Tax changes from April 1, 2026
Chancellor Rachel Reeves confirmed Vehicle Excise Duty rates will rise in line with the Retail Price Index from the new financial year on April 1, 2026, affecting cars, vans and motorcycles. The Chancellor’s Autumn Budget also set out a plan to introduce pay-per-mile charges for electric and hybrid owners from 2028, while first-year VED bands were adjusted earlier, from April 1, 2025.
Under the revised first-year scheme, zero emission cars will pay a first-year rate of £10 until 2029–2030. Vehicles emitting between 1 and 50g of CO2 per kilometre, including hybrids, will pay £110 in the first 12 months of registration. By contrast, higher-emitting models have seen steeper rises: cars in the 76–90g/km bracket previously at £270 have been reshaped as part of a scale that now reaches up to £5, 490 for the most polluting vehicles; with the inflation-linked increase that comes into force in April, some of those most polluting cars could cost buyers as much as £5, 690 in first-year duty.
‘26’ plate from March 1, 2026 and buyer timing
From March 1, 2026, all new cars registered will carry a ‘26’ plate, and experts warn that March is when a string of rule changes begin to bite. What makes this notable is the timing: buyers who register a vehicle in March could face the new registration sequence and then see VED rise on April 1, multiplying the short-term cost consequences of a purchase.
Steve Ramsey on the expensive car supplement and costs
Steve Ramsey, Go Compare Motoring Expert, highlighted the ‘expensive car supplement’ cliff edge. If a car’s list price is over £40, 000, buyers will pay an extra £410 at current rates for each of the next five years — more than £2, 000 extra compared with a car listed at £39, 995. Ramsey emphasised that it is the list price that counts for this calculation, not the discounted or negotiated price paid at the dealer.
For electric vehicles there is a specific threshold change: the expensive car supplement threshold for EVs rises to £50, 000 at the start of April. Ramsey also warned that if you buy insurance on the same day the car is delivered you could pay nearly 40% more than if you had obtained a quote 26 days earlier.
Diesel RDE2 standard and banded charges
Certain diesel cars that do not meet the Real Driving Emissions 2 (RDE2) standard for nitrogen oxide emissions will face higher Vehicle Excise Duty. All diesel cars that fail RDE2 will see increased charges if they emit between 1 and 255g/km; rates are set to be equalised once emissions exceed 255g/km. This compliance-linked structure creates a direct cause-and-effect: noncompliance leads to higher VED, incentivising purchase or retention of RDE2-compliant diesels.
Specific band uplifts already signalled include band rises for higher-emission cars: the 151–170g/km band increases from £1, 360 to £1, 410, and the 171–190g/km band moves from £2, 190 to £2, 270.
HM Revenue & Customs, DVLA, Advisory Fuel Rates and enforcement
Vehicle Excise Duty is administered by HM Revenue & Customs and enforced through the Driver and Vehicle Licensing Agency. HMRC also updates Advisory Fuel Rates each quarter, including March, which are used to calculate tax-free business mileage reimbursement. Ramsey advised keeping accurate daily mileage logs so reimbursement claims align with any AFR changes.
Payment options for VED include monthly Direct Debit, six-monthly and annual plans; paying annually is slightly cheaper because other payment methods carry a surcharge. Number plate rules remain strict: the DVLA’s requirements must be followed or a motorist can lose their registration, face a £1, 000 fine and fail their MOT, while police have stepped up checks on cloned plates and illegal spacing.
Office for Budget Responsibility revenue forecast and miscellaneous items
The Office for Budget Responsibility forecasts VED will raise £9. 1 billion in 2025/26, equal to 0. 3% of national income. The broader implication is that the tax changes are expected to deliver material government revenue while reshaping incentives across vehicle types.
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