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Rachel Reeves confirms new £445 charge for drivers

Reach Daily Express | April 26, 2026 12:39 PM CST

Some drivers are paying £445 to get behind the wheel of their vehicles under new car tax charges introduced by Rachel Reeves. The Chancellor is in charge of Vehicle Excise Duty (VED) fees, with new increases hitting drivers from earlier this month.

Among those affected by new tax fees are cars registered between 2001 and 2017, with owners placed into one of 13 tax bands based on their vehicle emissions. Vehicles falling into Band K, emitting between 201 and 225g/km of CO2, are impacted by price hikes, with bills rising to £445 per annum.

This is a £15 increase on charges applied to road users before April 1, where annual VED costs for Band K drivers stood at just £430. Between the 2024/25 tax year, owners in this category were charged just £415, meaning costs have jumped £30 in just over a year.

However, these owners are not paying the most expensive rates, with more polluting models slapped with higher costs. Vehicles in car tax Band L, emitting between 226 and 25g/km of CO2 will cost £760 per year to use the roads in 2026. Meanwhile, those in car tax Band M for cars emitting over 255g/km if Co2 will pay £790 per annum under the updates.

VED rates increase every spring in line with the Retail Price Index (RPI) inflation figures to make sure tax revenues maintain their real-term value. VED is now applied to almost all vehicles, with petrol, diesel, and now electric cars all paying the rates.

However, high-emission vehicles are usually targeted more than cleaner models, with electric vehicles offered the most affordable rates.

HM Revenue and Customs (HMRC) confirmed the new VED rates towards the end of last year after Rachel Reeves' Autumn Budget statement. Motorists must pay VED to stay on the roads, with road users able to settle their charge annually, every six months or monthly via Direct Debit.

The RAC explained: "Chancellor Rachel Reeves announced important changes to the car tax system in the UK as part of the Autumn Budget. These changes will affect how much road tax you will pay in 2026 and beyond."