Car Tax 2026: Every VED Rate, Band and Rule Explained

Quick Answer: UK car tax, officially Vehicle Excise Duty (VED), changed on 1 April 2026. The standard annual rate for most cars registered after April 2017 is now £200 per year, up from £195. Electric vehicles are no longer exempt and pay £200 from year two onwards. Cars registered between March 2001 and March 2017 pay CO2-banded rates ranging from £20 to £790 per year. The Expensive Car Supplement rose to £440 for high-value vehicles, with the EV threshold raised to £50,000. From April 2028, a new pay-per-mile electric VED system (eVED) will replace the current flat rate. If rising car tax is making your current vehicle uneconomical, Sell My Car Today offers a free instant valuation at sellmycartoday.uk, call 03337 729 283 for a same-day offer.

What Is Car Tax and Why Does It Change Every April?

Car tax — the term most UK drivers use — is officially called Vehicle Excise Duty (VED). It is an annual charge administered by the DVLA on behalf of HM Treasury and is a legal requirement for any vehicle driven or parked on a public road in the UK.

VED is not a fee for road maintenance, despite the historical name "road tax." It goes into general Treasury funds. Driving without valid VED can result in a fine of up to £1,000, clamping or seizure of the vehicle, and prosecution.

The government adjusts VED rates each April in line with the Retail Price Index (RPI), which tracks average UK price changes. The April 2026 changes were announced in the Autumn Budget 2024 by Chancellor Rachel Reeves and came into force on 1 April 2026.

The most significant structural change in recent years was not April 2026 but April 2025, when electric vehicles lost their full VED exemption. April 2026 is the first complete financial year in which all EV owners pay road tax.

The Three VED Systems — Which One Applies to Your Car?

Your car's VED rate is determined by when it was first registered. There are three completely separate systems operating simultaneously, and which one applies to you depends entirely on your registration date.

System 1: Registered on or after 1 April 2017

This covers the majority of cars currently on UK roads. These vehicles pay:

• A first-year rate based on CO2 emissions at the time of new registration
• A standard annual rate of £200 from year two onwards, regardless of emissions
• An Expensive Car Supplement of £440 per year for years two to six, if the original list price exceeded £40,000 (or £50,000 for electric cars registered from 1 April 2026)

The first-year rate is typically paid by the original buyer at the dealership and is included in the purchase price of a new car. If you buy used, you only encounter the £200 standard rate unless you buy new.

First-year rates for new cars registered from 1 April 2026:

CO2 emissions (g/km)	First-year VED rate
0 (zero emission)	£10
1 to 50	£115
51 to 75	£135
76 to 90	£175
91 to 100	£195
101 to 110	£220
111 to 130	£270
131 to 150	£430
151 to 170	£745
171 to 190	£1,280
191 to 225	£2,340
226 to 255	£3,740
Over 255	£5,690

These first-year rates reflect the government's emissions policy. The top band of £5,690 targets the highest-emitting vehicles — typically large performance cars and SUVs. Diesel cars not meeting Real Driving Emissions (RDE2) standards pay a higher first-year rate in the relevant band.

Standard rate from year two: £200 for all fuel types, including electric.

System 2: Registered between 1 March 2001 and 31 March 2017

These vehicles sit in a graduated CO2 letter-band system with 13 bands from A to M. Unlike post-2017 cars, the CO2 band applies every year, not just the first.

Full CO2 band rates for 2026/27 (effective 1 April 2026):

Band	CO2 (g/km)	Annual VED rate
A	0 to 100	£20
B	101 to 110	£20
C	111 to 120	£35
D	121 to 130	£170
E	131 to 140	£200
F	141 to 150	£225
G	151 to 165	£275
H	166 to 175	£325
I	176 to 185	£360
J	186 to 200	£410
K	201 to 225	£445
L	226 to 255	£760
M	Over 255	£790

Important note on Band K: Band K also includes any car emitting over 225g/km that was registered before 23 March 2006. This is a historical quirk that catches some older high-emission vehicles in a band lower than their emissions would otherwise suggest.

Important note on Band A: From 1 April 2026, Band A cars (0 to 100g/km) that previously paid £0 VED now pay £20 per year. If your tax reminder shows a charge you have not paid before, this is the reason.

This system is where the "car tax trap" most severely bites. A car in Band L or M pays £760 or £790 per year. Combined with rising insurance premiums and depreciation pressure from ULEZ regulations, these vehicles are increasingly difficult to sell or justify keeping.

System 3: Registered before 1 March 2001

These vehicles are taxed purely on engine size, not emissions. There are two rates:

Engine size	Annual VED rate 2026/27
1,549cc and under	£220 per year (or £231 by monthly Direct Debit)
1,550cc and above	£360 per year (or £378 by monthly Direct Debit)

You can find your exact engine size on your V5C registration certificate or in your vehicle handbook.

The Historic Vehicle Exemption — Free VED for Cars Over 40 Years Old

Any vehicle manufactured before 1 January 1986 qualifies for the Historic Vehicle tax class as of 1 April 2026, under the rolling 40-year rule.

Historic Vehicle class means:

• Zero VED — no road tax to pay
• No annual MOT required (though this does not remove the legal requirement to keep the vehicle roadworthy)
• You must still register the exemption with the DVLA — it does not apply automatically
• The vehicle must not have been "substantially changed" — modifications to the body, chassis, axles or engine beyond what was available in period can disqualify it

Each year on 1 April, the rolling exemption advances by one year. In April 2027, vehicles manufactured before 1 January 1987 will qualify. This is confirmed government policy and there are no announced changes to this scheme.

Electric Vehicle Tax in 2026 — The End of Free Road Tax

Until 31 March 2025, electric vehicles paid zero VED. That exemption ended on 1 April 2025 under legislation in the Finance Act 2023. April 2026 is the first full financial year in which all EV owners pay road tax.

How EV VED works from April 2026:

When your EV was registered	VED rate
On or after 1 April 2026	£10 in year one, then £200 per year from year two
Between 1 April 2017 and 31 March 2025	£200 per year (standard rate)
Between 1 March 2001 and 31 March 2017	£20 per year (Band A legacy rate)
Before 1 March 2001	£220 per year if under 1,549cc, £360 if above

The Expensive Car Supplement for EVs:

Electric cars with an original list price above £50,000 pay the Expensive Car Supplement of £440 per year, in addition to the standard £200 rate, for five years from the second year of registration.

Critically, the £50,000 EV threshold is more generous than the £40,000 threshold that applies to petrol, diesel and hybrid cars. This was a specific change from April 2026, intended to keep more EV buyers outside the supplement bracket as battery costs drive up list prices.

What this means in practice for an EV owner:

A Tesla Model 3 Long Range registered in 2022 with a list price of £54,990 now pays £200 (standard rate) plus £440 (Expensive Car Supplement) = £640 per year in VED. Previously, the same car paid nothing.

The Expensive Car Supplement — Who Pays It and How Much

The Expensive Car Supplement — sometimes called luxury car tax — applies to any new car with an original list price above the relevant threshold. It is paid in addition to the standard annual VED rate for five years, beginning from the second year of registration.

From 1 April 2026:

• Petrol, diesel and hybrid cars: threshold remains at £40,000
• Electric cars: threshold raised from £40,000 to £50,000
• Supplement amount: £440 per year (up from £425 in 2025/26)

The supplement applies regardless of what you pay for the car secondhand. It is based on the original manufacturer's list price at first registration. If you buy a nearly-new car that originally cost £43,000 but you pay £35,000 for it used, you still pay the supplement for the remaining years of the five-year period.

A car originally listed at £45,000 and registered new in 2024 would attract the supplement from year two until year six of registration — meaning the supplement expires in 2030. If you buy that car used in 2028, you still pay the supplement for two years (2028 and 2029).

The Pay-Per-Mile EV Tax (eVED) — What Is Coming in April 2028

The current flat-rate VED for electric vehicles is a transitional arrangement. From April 2028, the government will introduce a new electric vehicle excise duty (eVED) based on actual mileage driven.

Under eVED from April 2028:

• Fully electric cars will pay 3 pence per mile
• Plug-in hybrid cars will pay 1.5 pence per mile
• Payment will be made annually, based on a mileage estimate, with a true-up at the end of each year

For context: the average UK driver covers approximately 7,400 to 10,000 miles per year. At 3p per mile, this equates to approximately £222 to £300 per year for a fully electric car — slightly more than the current £200 flat rate.

The eVED system is confirmed policy but implementation details are still being finalised. EV owners buying in 2026 should factor in this future change when calculating their total ownership costs.

How VED Affects the Value of Your Car When You Sell

This is the question most relevant to sellers — and it is one most VED guides overlook entirely.

High VED directly reduces the resale value of your car. The mechanism is simple: buyers calculate the annual cost of ownership before deciding what to pay. A car with £790 annual VED (Band M) costs the buyer £790 more per year than an equivalent car in Band E at £200. Over a three-year ownership period, that is £1,770 in additional tax. Rational buyers discount their offer accordingly.

This is why the car tax trap affects sellers most acutely. A 2008 BMW 5 Series 535d in Band L pays £760 per year in VED. A buyer knows this before they make an offer. They will either offer less to compensate, or avoid the car entirely in favour of a lower-band equivalent.

The specific registration dates that create value divides:

The date 23 March 2006 is one of the most important in the UK used car market. Cars registered before this date in Band K pay £445 per year. Cars registered after this date with the same emissions level may fall into Band L at £760. A gap of days in registration date can mean a £315 annual VED difference — and a meaningful reduction in resale value.

Similarly, the April 2017 boundary matters. A 2016 car sits in the CO2-banded system for life. A 2017 car pays £200 standard rate from year two. The 2017 car is often worth more specifically because its ongoing VED is lower and more predictable.

Practical guidance for sellers:

• Cars in Bands L and M (£760 to £790) are the hardest private sales in 2026, particularly if they also face ULEZ non-compliance in London. Specialist buyers understand these markets better than private buyers.
• Cars that qualified for Band A zero-rate VED before April 2026 but now pay £20 may face slightly softened demand as the previous "free to tax" selling point is gone.
• Electric cars now pay VED from year two — a change that has already begun to affect used EV values, particularly at the premium end where the £440 supplement also applies.

If rising VED is making your car expensive to keep and you are considering selling, Sell My Car Today provides a free instant valuation based on live market data, not generic guides. Enter your registration at sellmycartoday.uk or call 03337 729 283.

How to Check Your Exact VED Rate

Your car's exact VED rate depends on its specific CO2 figure, registration date and original list price. The safest way to confirm your exact rate is:

1. Go to gov.uk/check-vehicle-tax and enter your registration number
2. The DVLA system will confirm your current tax status, the rate applicable to your vehicle and your renewal date
3. Cross-reference your CO2 figure on your V5C registration certificate — look for the field labelled "CO2 emissions"

For pre-2001 cars, check your vehicle handbook for the exact engine size in cubic centimetres (cc).

Can You SORN Your Car to Avoid Paying VED?

Yes. A Statutory Off Road Notification (SORN) allows you to legally stop paying VED if you take your vehicle off the road entirely — kept on private land and not driven or parked on a public road.

You can declare SORN at gov.uk/make-a-sorn at any time. Any unused months of paid VED are automatically refunded.

If you SORN a car and later decide to sell it, the car must be taxed by the buyer before being driven on a public road. Sell My Car Today buys SORN vehicles and arranges collection on private property where required.

Frequently Asked Questions

Is Your Car Tax Making It Uneconomical to Keep?

If your car sits in Band L or M, or carries the Expensive Car Supplement on top of a £200 standard rate, the annual VED bill combined with rising insurance premiums and fuel costs can make continued ownership increasingly difficult to justify.

The used car market in 2026 reflects this pressure. High-VED cars are taking longer to sell privately and facing stronger buyer resistance than in previous years. Getting a fair price through a private sale for a Band L or M car in particular requires patience and realistic pricing.

Sell My Car Today buys cars in every VED band, every condition, and every age. We provide honest market-based valuations and pay before we leave your driveway.

• Free instant valuation at sellmycartoday.uk — 30 seconds, no personal details required
• Same-day collection across all London postcodes
• Payment by bank transfer before keys change hands
• Outstanding finance settled on the day of collection
• DVLA notification handled by us

Call 03337 729 283 or message us on WhatsApp at 07424 956118.