Petrol and diesel drivers face big VED rises

New changes to Vehicle Excise Duty (VED) announced in the Autumn Budget will see first-year car tax rates rise from 1 April 2026, with the highest-emission petrol and diesel cars facing bills of up to £5,690 after an expected inflation adjustment.

Finance Secretary Rachel Reeves confirmed that VED bands for cars, light commercial vehicles and motorcycles will be increased in line with inflation. The government says the changes are intended to encourage drivers toward zero- and low-emission vehicles, while significantly increasing charges for the highest CO₂‑emitting models.

What’s changing

• The new VED schedule comes into force on 1 April 2026 for newly registered vehicles.
• Brand-new zero-emission vehicles (ZEVs) will continue to pay the minimum first-year rate of £10 through the 2029–2030 period.
• First-year rates for higher CO₂ bands rise substantially; the top band (255 g/km and above) is set at £5,490, and may be increased to £5,690 after an inflation adjustment.

Automotive analyst Pete Barden warned that further inflation-linked increases could push the highest VED band from £5,490 to approximately £5,690 in coming months — a rise that could place a heavy one-off tax burden on owners of very high-emission cars.

Expected first‑year VED rates (from 1 April 2026)

• 0 g/km (ZEV): £10
• 1–50 g/km: £115
• 51–75 g/km: £135
• 76–90 g/km: £280
• 91–100 g/km: £365
• 101–110 g/km: £405
• 111–130 g/km: £455
• 131–150 g/km: £560
• 151–170 g/km: £1,410
• 171–190 g/km: £2,270
• 191–225 g/km: £3,420
• 226–255 g/km: £4,850
• 255 g/km and above: £5,690 (after inflation adjustment)

(These figures reflect the government’s announced band structure and the likely inflation uplift noted by analysts.)

What drivers should do now

• Check your car’s official CO₂ emissions band — this determines the applicable VED rate.
• If you plan to buy a new car, factor first‑year VED into the total cost, especially for high-emission petrol or diesel models.
• Consider low- or zero-emission alternatives where possible: new ZEVs still benefit from the £10 first‑year rate.
• Watch for the government’s detailed guidance and the final confirmed rates ahead of 1 April.