Your Car Tax Just Went Up Again: What the 2026-27 VED Rise Really Means

Few annual bills arrive with as little fanfare as vehicle tax. There is no letter at the door and no moment of reckoning. A reminder lands, a direct debit adjusts, and another slice of your motoring budget quietly changes. But from 1 April 2026, Vehicle Excise Duty (VED) rates for cars, vans and motorcycles rose in line with inflation, and the Daily Express has framed it as a rising charge that began under Rachel Reeves.

The headline grabs attention, but the real story is how VED is now built. It is a patchwork of rules depending on when your vehicle was registered, what it emits and how much it cost. This article unpicks that patchwork and explains the law behind it, along with the mistakes that turn a routine annual payment into an expensive penalty.

What happened

According to the Express report, VED rates for 2026-27 went up on 1 April 2026, with the increase tracking inflation. The article stresses that the amount you pay depends on vehicle type, emissions standard and registration date. That last point is the one most drivers underestimate.

The Express headline refers to a £360 charge. I cannot verify from the summary which vehicle category or scenario that figure applies to, and it would be misleading to assume it describes the typical motorist. Treat it as one data point, not an average. Your own figure depends entirely on your vehicle, which is why checking it on the official GOV.UK tax rates pages matters more than any headline.

For context, the standard annual rate for most cars registered from April 2017 onwards sat at £195 in 2025-26, and an inflation-linked uplift pushes that figure up modestly for 2026-27. Our own breakdown of the new bands in car tax changes from April 2026 covers the individual rates in detail, so here we will focus on the logic behind them.

Why it matters: three tax systems in one

Most drivers assume there is one road tax. In reality, three overlapping regimes exist, and your vehicle's registration date decides which applies.

1. Cars registered before 1 March 2001. These are taxed by engine size, usually in two simple bands. Owners of older, larger-engined cars often pay more than they expect, though some qualify for historic vehicle exemption once the vehicle is over 40 years old and meets the criteria.

2. Cars registered from 1 March 2001 to 31 March 2017. These are taxed by CO2 emissions band. The cleaner the car, the lower the bill, and the gap between the lowest and highest bands is substantial. Because the rates are fixed to bands, inflation uplifts hit every band, and the highest-emitting vehicles feel the largest cash increase.

3. Cars registered from 1 April 2017. These carry a first-year rate based on CO2 emissions, which is paid at the point of first registration and usually built into the on-the-road price. After that, the vehicle moves to a flat standard rate. Cars with a list price above a set threshold also pay the expensive car supplement for several years on top of the standard rate.

This is why the same inflation-linked rise lands so differently across households. A nearly new family hatchback owner sees a small step up on a flat rate. Someone with an older, higher-emitting car in a top CO2 band sees a bigger cash jump. A driver of a pricier new model may also be paying the expensive car supplement, which is itself subject to uprating.

The Reeves factor, and what actually changed

The "started under Rachel Reeves" angle refers to the changes that took effect from 1 April 2025, when electric vehicles stopped being exempt from VED. Since then, new electric cars pay a low first-year rate and then the standard rate, and the expensive car supplement threshold for electric cars was set higher than for petrol and diesel. Older electric cars registered before April 2017 moved into a low band.

The 2026-27 increase is a separate matter. It is the uprating that has historically followed inflation, and it applies on top of the structural change. The result is that electric car owners, who paid nothing until recently, are now part of the same annual inflation adjustment as everyone else.

Looking further ahead, the government has also set out plans for a per-mile charge on electric vehicles later in the decade. We explain how that is expected to work in our guide to the 3p pay-per-mile road tax and in the wider piece on electric vehicle tax changes. It is worth keeping in mind that VED may not remain the only tax on electric vehicles.

Vans and motorcycles

The Express piece notes that vans and motorcycles are also covered. In broad terms:

• Motorcycles are taxed by engine size, so a small commuter machine costs far less than a large touring bike.
• Vans (light goods vehicles) usually pay a flat rate, though rules differ depending on when the van was registered and whether it is classed as a light goods vehicle. Anyone running a business fleet should check the exact category on GOV.UK, because mistakes in classification can cause problems with enforcement.

The legal angle

VED is governed by the Vehicle Excise and Registration Act 1994. Several principles from that framework are worth knowing.

The keeper is responsible. The duty falls on the registered keeper, not necessarily the owner. If you are the keeper recorded by the DVLA, you are responsible for the vehicle being taxed or declared off the road.

Tax is not transferable. Since 2014, when paper tax discs were abolished, the tax no longer transfers with the vehicle. When you sell, the existing tax is cancelled and the DVLA refunds any full remaining months automatically. The new keeper must tax it before using it on the road. If you have sold a vehicle and are still receiving demands, our guide to what to do if you receive a fine for a sold vehicle explains the practical steps.

SORN applies if the vehicle is off the road. A Statutory Off Road Notification (SORN) means the vehicle is kept off public roads, typically on a drive, in a garage or on private land. Without a SORN, the DVLA expects the vehicle to be taxed, even if it is not being driven. Forgetting this is one of the most common reasons for unexpected penalties.

Enforcement is automated. The DVLA matches its records against ANPR camera data. You do not need to be stopped. If a vehicle appears on a camera and the database shows no tax or SORN, an enforcement process can begin. Typically this starts with a letter and an out-of-court penalty offer. The DVLA has said it can pursue it further through the courts, where the maximum fine is considerably higher, and it also has powers to clamp or remove vehicles. For more on how this plays out, see our piece on DVLA enforcement, clamping and crushing.

Because the stakes can escalate, anyone facing a DVLA penalty they believe is wrong should consult the official guidance on GOV.UK or seek independent advice.

What drivers should know

This is general information rather than advice on your own situation, but a few practical points apply widely.

Check your actual rate, not the headline

Use the DVLA's online vehicle enquiry service or the GOV.UK tax calculator with your registration number. It will show your tax status and when it is due. Do not rely on press figures like £360, which may refer to a specific band or case.

Watch your direct debit

If you pay by direct debit, the DVLA will adjust the amount when rates rise, but you should check that the new figure is correct. Paying monthly typically costs more than paying annually because of a surcharge. If cash flow allows, paying in one go can reduce the overall cost. The surcharge percentage and conditions are set out on GOV.UK, so check the current terms before choosing.

Don't assume a reminder will arrive

The DVLA usually sends a reminder, but it is not a legal requirement. If your address is out of date, the reminder may go astray, while the obligation to tax the vehicle remains. Keep your V5C logbook details current, and diarise the renewal date yourself.

New owners, act immediately

If you buy a used vehicle, tax cannot be carried over from the previous keeper. Many drivers get caught after buying privately, assuming the seller's tax covers them. It does not.

Declare SORN promptly

If a vehicle is going into storage or awaiting repair, make the SORN declaration before the tax lapses. A SORN can be made online in minutes, and the same applies if the vehicle will be off the road for a long period, such as a classic car laid up for winter.

Keep records

Retain your tax confirmation and payment receipt. If you ever dispute a penalty, proof of payment or of a SORN declaration is far more persuasive than a recollection.

Think about the vehicle you are buying

If you are weighing up a purchase, VED is part of running costs. The registration date and CO2 band can make a real difference over several years. A car first registered just before or after a threshold date could change the annual bill noticeably. Factor in the expensive car supplement if the list price is high.

Looking ahead

The shift from fixed bands to inflation-linked annual uprating means VED is now something drivers should expect to rise every April, rarely falling. For petrol and diesel owners, the CO2-based structure means the cost gap between cleaner and dirtier vehicles tends to widen in cash terms as rates rise.

For electric owners, the era of VED exemption is over, and the further move to per-mile charging is expected to change the picture again. The political debate is likely to centre on fairness. Supporters argue that as fuel duty revenue falls with the shift to electric cars, motoring taxes must adapt. Critics argue that taxing early adopters risks slowing the switch away from petrol and diesel. We do not yet know how the details will settle, so watch for official announcements.

In the meantime, the practical message is simple. VED is an annual bill that rewards attention. Know which regime your vehicle falls under, check the rate on GOV.UK, keep your details current, and never let tax lapse by accident. A small increase on a flat rate is an inconvenience. A missed renewal or a forgotten SORN can turn into a penalty that costs far more than the tax itself.

Source: Daily Express report on the VED increase

This article is general information about UK motoring rules and is not legal or financial advice. For your own circumstances, consult GOV.UK, the DVLA or a qualified adviser.