Drivers face £40 car tax rise from this date in 2026 Vehicle Excise Duty hike

Motorists across the UK are set to be hit with car tax rises of up to £40 per vehicle from this exact date in 2026. Vehicle Excise Duty (VED) increases every year in line with Retail Price Index (RPI) inflation with 2026 set to be no different.

Next year, VED rates are set to increase on April 1, 2026 with petrol, diesel and electric car owners all set to face rises. However, it's the most polluting vehicles that will be most affected and face the higher VED band increases. Experts at Pete Barden explained how the current RPI inflation predictions could impact on fees hitting drivers next Spring.

Pete Barden explained: "Every autumn, the September inflation data becomes a key figure for drivers - because it's used to set the following April's Vehicle Excise Duty (VED) rates. The latest figures from the Office for National Statistics confirm that the headline inflation level held steady at 3.8% in September 2025, the same as in August.

"While the Government typically bases VED rises on the Retail Prices Index (RPI) rather than CPI, the two measures tend to move in similar directions - and RPI is still expected to hover around 4.6% for September, according to forecasts from analysts.

"That means drivers should brace for another inflation-linked rise in road tax from April 2026, with costs for new and existing vehicles likely to climb by a similar percentage - around 4.6%. For many motorists, this could mean paying £10-£40 more a year depending on their vehicle's emissions band."

Cars registered between 2001 and 2017 pay VED fees on a sliding scale of emission bands. Band A is for cars emitting up to 100 g/km of CO2, with motorists falling into this category hit with just £20 bills this year.

These fees slowly increase until the highest polluting cars, emitting over 255g/k of CO2, pay £760 per annum. Models registered after 2017 move onto the new standard rate, which is currently charged at £195 per year.

Electric cars were exempt from road tax fees but this luxury was axed last year, with EVs liable to pay the standard VED fees from April 2025.