Some drivers are being forced to pay £2,270 per year to get behind the wheel, as part of new tax tweaks introduced by Rachel Reeves. The Chancellor of the Exchequer has overseen a series of new updates to Vehicle Excise Duty (VED) fees this April, with petrol, diesel and electric car owners all affected.
VED rates rise every 12 months in line with inflation, with price hikes coming every spring. Motorists across the board are affected by the changes, but brand-new car owners face the highest bills with first-year tax bills up in the thousands.
Among those impacted are the owners of brand new cars emitting between 171 and 190g/km of CO2. According to HM Revenue and Customs, owners of new cars falling into this category will pay £2,270 to use the road over this tax year.
This is already an £80 rise on the £2,190 first-year tax fees for cars emitting between 171 and 190g/km of CO2 last year. Over the 2024/25 tax year, vehicles in this band were paying just £1,095 per year to use the roads.
Labour opted to double first-year VED tax fees last year, whereas this April's increase is only an annual inflationary rise. Performance models, large petrol and diesel SUVs, and luxury vehicles tend to fall within this category, meaning many owners could be affected.
Confused.com said: "When you buy a brand-new car, you'll pay a first-year rate of vehicle excise duty (VED). This is based on your car's CO2 emissions. Higher emissions usually mean a higher tax bill. The first-year rate is designed to encourage buyers to choose low or zero-emission cars."
It's not the most expensive first-year fee, with brand new cars emitting over 255g/kn of CO2 paying as much as £5,690 to use the roads.
After the first year on the roads, brand new cars will start paying the standard VED fee for cars registered after 2017. This currently stands at £200 per year, but is also liable to annual rises, meaning this will likely be more expensive next April.
HMRC confirmed the April 2026 tax bands shortly after Rachel Reeves Autumn Budget statement last November.
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