New HMRC 2026 tax bands as petrol and diesel drivers hit with increase

New VED rates took effect from April 1, meaning motorists have been paying the higher rates for the past two weeks. For cars registered after 2017, standard VED rates have increased from £195 to £200 in 2026.

First-year rates are more affected, with owners of brand -new highly polluting models paying £200 more as bills rise from £5,490 to £5,690. Cars found to be emitting between 226 and 255g/km of CO2 are also set to face staggering hikes, with prices up from £4,680 to £4,850 per year.

Vehicles registered between 2001 and 2017 also face rises, with costs up across almost all of the 13 tax bands. Cars emitting over 255g/km of CO2 will pay £790 to use the road in 2026/27, up from the previous £760 fee. Slightly cleaner vehicles emitting between 225 and 255g/km of CO2 are next, with fees up £25 from £735 to £760 per year.

Drivers in car tax bands H and I are next with fees up £15, followed by a £10 rise for vehicles in bands G and F. Cars falling into tax bands C and D will pay £5 more in 2026, with no increases for lower polluting cars in bands A and B. HMRC implements legislation around VED rates, with DVLA handling the collection and enforcement of charges.

HMRC also revealed that price hikes were on their way shortly after Rachel Reeves‘ Autumn Budget.

They explained: “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.”