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Motorists are being hit with £3,420 fees to stay on the road after new car tax updates from Rachel Reeves. The Chancellor has overseen changes to Vehicle Excise Duty (VED) fees from April, affecting almost all drivers across the UK.

Fees vary depending on when a vehicle was built, with a flat £200 charge for cars registered after 2017 and a sliding scale of tax bands for models registered between 2001 and 2017. Brand new cars face different fees altogether, with first-year tax charges among the most expensive on the road.

Brand-new owners pay hefty fees ofthousands of pounds in year one, with charges calculated based on vehicle emissions. Among those set to pay eye-watering fees are owners of brand new cars emitting between 191 and 225g/km of CO2.

Drivers falling into this category will pay £3,420 in year one to get behind the wheel, before reverting to the standard £200 fee from year two. This is a £120 rise on the £3,300 fee issued to road users before updates came into effect in April.

However, fees have massively soared over the past couple of years, with motorists in this band paying just £1,650 over the 2024/25 tax year. Motorists unsure of what their vehicle's overall emissions are can find the details in their V5C logbook.

It could be slightly easier to find this information for a brand-new car, with manufacturers usually advertising emissions totals online or in promotional material.

Drivers must tax a brand-new car immediately upon first registration to legally drive their new purchase on public roads. VED is a legal requirement, with road users able to pay for their tax for 12 months upfront or in a range of instalments.

HMRC confirmed new VED fees would come into effect last year after the Autumn Budget.

They said: "As announced at Budget 2025, the Government will introduce legislation in Finance Bill 2025-26 to uprate Vehicle Excise Duty rates for cars, vans and motorcycles in line with the Retail Price Index (RPI) for 2026 to 2027. This will take effect from 1 April 2026."