Some drivers are facing bills of £170 to stay on the road due to new car tax changes introduced by Rachel Reeves. Vehicle Excise Duty (VED) tax bands were updated from April 1, with rising costs for almost all petrol, diesel and electric car owners.

VED rates rise with inflation every spring, and 2026 is no different, with fees up across the board. Those impacted by new VED bands include motorists with vehicles first registered between 2001 and 2017, with road users placed into one of 13 tax bands.

These bands are determined based on overall vehicle emissions, with higher polluting models paying more to stay behind the wheel. Vehicles in car tax band D, emitting between 121 and 130g/km of CO2, will pay £170 in VED fees between the 2026/27 tax year.

This is a £5 increase on the £165 fee applied to motorists over the last tax year up until the start of April 2026. The £5 rise mirrored the increase of the year before, with road users charged £160 to use the roads over the 2024/25 tax year.

Cars in this category usually include petrol and diesel hatchbacks and some compact SUVs, a segment of vehicles that are hugely popular on UK roads. Higher-polluting cars are charged more to use the roads, with cars emitting over 255g/km of CO2 paying £790 from this April.

Meanwhile, vehicles in car tax band L, emitting between 226 and 255g/km of CO2 will pay £760 per annum. VED is a legal requirement, meaning road users must ensure they correctly tax their vehicle before getting behind the wheel and driving on a public road.

Motorists who are no longer using their vehicles and wish to stop paying vehicle tax can apply for a Statutory Off Road Notification (SORN).

HM Revenue and Customs confirmed the increase in VED fees late last year after Rachel Reeves' Autumn Budget statement.

HMRC 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."