Car tax 2026: The new VED rates explained

Vehicle Excise Duty (VED) rates for 2026/2027 have increased, including higher first-year charges. Updated rates apply depending on your vehicle’s registration date and emissions.

First-year VED rates for 2026/27

When you buy a brand-new car, you’ll pay a first-year rate of vehicle excise duty (VED). This is based on your car’s CO2 emissions. Higher emissions usually mean a higher tax bill. The first year rate is designed to encourage buyers to choose low or zero-emission cars.

Below are the updated first year VED rates for petrol, diesel¹, alternative fuel and zero emission cars registered on or after 1 April 2026. 

¹Diesel cars tested to RDE2 standards

Prices will differ for diesel cars that are tested to RDE standards.

From the second year onwards, most cars move to a standard rate. Some vehicles over £40,000 pay an extra supplement for five years after the first year.

Let's take a closer look below:

Annual standard rates

Cars first registered after April 2017 are subject to the first-year ‘showroom tax’, with the rate based on the vehicle’s CO₂ emissions. From the second year onwards, most drivers pay the standard rate of £200 per year (up from £195 in 2025/26).

Cars with a list price of more than £40,000 are also subject to an additional annual supplement of £440 for the first five years. For zero-emission (electric) cars, this threshold increases to £50,000 from 1 April 2026, meaning only EVs above this price pay the supplement.

After the first year:

• Most petrol and diesel cars pay £200 annually.
• Zero-emission cars registered from 1 April 2026 pay £10 in year one, then the £200 standard rate.
• Cars registered between 1 April 2017 and 31 March 2026 also follow the £200 annual rate.

VED tax cost for cars registered before April 2017

If your car was registered on or after 1 March 2001 and before 1 April 2017, your VED is based on CO2 emissions. Here are the latest annual rates for the 2026/27 tax year:

²This includes cars with a CO2 figure over 225g/km but were registered before 23 March 2006.

What tax band is my car in?

To find out which car tax band you’re in visit the GOV.UK website. You can find the emissions of both new and used cars.

You can also check your vehicle tax status using our car tax checker tool.

VED changes for EVs

Since last April, EVs are no longer exempt from VED. This change means all EV owners need to pay car tax, with rates depending on the vehicle's registration date.

What cars are exempt from paying VED?

You’re exempt from paying VED if your car is:

• More than 40 years old
• Used by a person who has an eligible disability
• Used by an organisation that provides transport for people who have an eligible disability
• An agricultural vehicle
• Has a Statutory Off-Road Notice (SORN) attached to it

Even if you're exempt from paying VED, you still need to tax your car.

VED tax and car insurance

You can't tax your car if you don't have car insurance. When you apply for tax, the DVLA checks whether your car has a valid MOT and insurance. If it doesn't you can't tax your car.

Without tax, you risk:

• An £80 fine. This can be reduced to £40 if pay within a certain time period.
• A £1,000 fine if caught driving without tax
• Vehicle clamping by the DVLA

And if you don't have valid car insurance, you could face even tougher measures. So before you tax your car, check your car is insured.

If you sell your car and cancel your insurance, you'll also be eligible for a car tax refund depending on how many months of remaining tax you've already paid for.

Figures taken from GOV.UK