Motorists with the keys to the latest brand new combustion vehicles will be most affected, with the most costly rises hitting first-year VED rates. This is a one-off charge paid in the first year a brand-new car is on the road, with costs ranging from just £10 for electric car owners. But those emitting over 255g/km of CO2 pay the highest rates, with bills set to jump £200 from £5,490 to £5,690 in 2026.

More sporty, high-performance models generally emit more pollution, meaning those with the keys to models from top brands such as Audi, BMW and Mercedes will pay more. Models registered after 2017 will switch to the standard VED fee from the second year on the roads. 

In 2025, first-year rates for the most polluting models doubled, with fees jumping from £2,745 to £5,490 per annum.

HM Revenue and Customs 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.”

VED is a legal requirement, meaning road users must pay the charge to retain their freedoms and stay on the roads. Failing to pay the rate is tax evasion and motorists risk being slapped with fines or having their vehicle confiscated in a major blow.