Motorists are set to pay hundreds of pounds to use the roads under major new car tax changes brought in by Rachel Reeves in 2026.
Rachel Reeves has hit drivers with new VED tax rises in 2026 (Image: Getty)
Certain drivers are paying up to £790 per year to get behind the wheel due to new fees introduced by Rachel Reeves. The Chancellor oversaw the introduction of new Vehicle Excise Duty (VED) tax bands from April 1, with almost all drivers set to face higher prices.
VED is calculated using a range of metrics depending on when a vehicle was registered and how many emissions it produces. Cars registered between 2001 and 2017 are placed into 13 tax bands, with the most polluting models paying more.
VED tax bands increased across the board from April 1 (Image: Getty)
It means some motorists are now paying almost £800 to retain their freedom to drive, in a blow to cash-strapped road users. Cars emitting over 255g/km of CO2 will now pay £790 per annum, a £30 increase on the £760 VED rates issued to these drivers over the last year.
Cleaner vehicles are also affected, with cars producing between 255 and 256 g/m of CO2 paying £25 more in the new tax year, while fees rise from £735 to £760 per year. Motorists with cars in Bands I, J and K are also affected, with costs rising by £15 per year from April 1.
Cars in bands F, G and H will be hit with £10 price hikes, while just £5 will be added to the bills for vehicles in bands D and E. It means lower polluting models emitting between 121 and 130g/km of CO2 are now set to pay £17 per year instead of £165.
However, some road users will miss the fees altogether, with drivers in Bands A, B and C, cars emitting up to 120g/km of CO2, not paying any extra to use the roads.
HMRC has previously 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.”
Vehicle Excise Duty bands based on g/km CO2 emissions – full list
A – Up to 100 – £20
B – 101 to 110 – £20
C – 111 to 120 – £35
D – 121 to 130 – £170
E – 131 to 140 – £200
F – 141 to 150 – £225
G – 151 to 165 – £275
H – 166 to 175 – £325
I – 176 to 185 – £360
J – 186 to 200 – £410
K – 201 to 225 – £445
L – 226 to 255 – £760
M – Over 255 – £790