Every April, the Vehicle Excise Duty (VED)—fancy talk for “car tax”—gets a little nudge. It’s tied to the Retail Price Index (RPI), which is basically inflation’s grumpy older cousin.
Because inflation has been acting like a teenager at a buffet—grabbing everything in sight—the RPI is higher. That means your car tax will likely climb by the inflation rate plus a bit more for good measure.
Think of it as the universe’s way of reminding you that nothing is free. Not even the oxygen your car burns. (Okay, that’s dramatic, but you get the vibe.)
Who Gets Hit the Hardest?
If you drive a petrol or diesel car registered after 2017, you’re in the “standard rate” club. That’s the big bucket of “everyone pays.” In 2026, that’s around £190 a year. For 2026, expect that to jump to around £195 or £200, depending on just how spicy inflation gets.
But here’s the punchline: electric vehicle (EV) owners, your tax-free holiday is over. Yep, starting in 2026, EVs started paying the standard rate. By 2026, you’ll be right there in line with the rest of us. No more smug silence at the pump.
And if you own a gas-guzzling SUV or a luxury car? Brace yourself. The “expensive car supplement” (an extra £410 per year on cars over £40,000) isn’t going anywhere. In fact, it might even feel heavier in 2026.
