Millions of motorists across the UK are facing higher motoring costs this month after new Vehicle Excise Duty (VED) rates officially come into force.

It marks one of the most significant shake-ups of car taxation in recent years.

Changes affect all types of cars.

Paying for the pleasure

The VED rate changes, introduced from the 1st April, affect petrol, diesel, hybrid and electric vehicles alike, with the Government aiming to create a more consistent system while encouraging a shift towards lower-emission driving.

For most motorists, the most immediate impact is a rise in the standard annual rate of VED.

Drivers of cars registered after April 2017 will now pay a flat £200 per year, up from £195.

While the increase may appear modest, it applies to millions of vehicles across the UK, adding to wider cost-of-living pressures already affecting households.

More significant changes apply to new vehicles, particularly those with higher emissions.

First-year “showroom tax” rates for petrol and diesel cars now range from around £115 to as much as £5,690 for the most polluting models, depending on CO₂ output.

Industry experts say this sharp increase is designed to discourage the purchase of high-emission vehicles and accelerate the transition to cleaner alternatives.

Electric shock

One of the most notable shifts is the continued expansion of VED to electric vehicles.

Once fully exempt from car tax, EVs are now firmly within the system.

From April 2026, new electric cars will pay £10 in the first year, followed by the same standard £200 annual rate as petrol and diesel vehicles.

Meanwhile, the £10 annual discount previously applied to hybrid and alternatively fuelled vehicles has been scrapped, bringing them in line with conventional cars.

The move reflects the growing number of electric vehicles on UK roads and the Government’s desire to ensure all drivers contribute to road funding.

There have been significant concerns about the Treasury shortfall due to the increasing number of EVs and their minimal VED levy.

Pay-per-mile taxing proposals for all vehicles are largely considered as the direction of travel, though not quite yet.

Premium pricing

There is some relief for buyers of higher-value electric vehicles. The threshold for the “expensive car supplement”—an additional charge applied to vehicles costing above a set amount—has been increased from £40,000 to £50,000 for EVs.

However, vehicles above this threshold will still face an extra charge of around £440 per year for five years, meaning high-end models remain significantly more expensive to tax.

For all drivers, the changes reinforce a clear message: vehicle choice is becoming increasingly tied to emissions and environmental impact.

Those buying new petrol or diesel cars, particularly SUVs and performance vehicles, are likely to face the steepest costs upfront.

Meanwhile, electric vehicles, although no longer tax-free, still benefit from lower first-year rates and more predictable long-term costs.

However, critics argue that bringing EVs into the tax system risks slowing adoption at a crucial time, especially as upfront purchase prices remain high.

A wider shift 

The VED changes form part of a broader package of rising motoring and household expenses this April, with increases to council tax, utilities and other bills contributing to what some analysts have dubbed an “awful April” for consumers.

Looking ahead, further reforms are already planned, including a potential pay-per-mile system for electric vehicles later in the decade.

For now, the new VED rates signal a decisive shift in UK motoring policy, one that aims to balance revenue with environmental goals, but which will leave many drivers paying more to stay on the road.