Key Highlights
- The Vehicle Excise Duty (VED) first-year rates will increase for 59 models across 24 brands from April 2026.
- Audi RS6, Lamborghini Huracan, and Mercedes-Benz GLS are among the cars facing a £5,690 charge.
- The policy aims to push drivers towards electric vehicle purchases by increasing taxes on high-polluting vehicles.
- New models emitting over 255g/km of CO2 will face higher first-year fees, with EVs remaining tax-free.
A Cynical Look at the New Car Tax Hike
April 1, 2026, is just around the corner and for those contemplating a new car purchase, better mark your calendars. The government’s decision to dramatically increase first-year Vehicle Excise Duty (VED) fees is set to hit 59 models from 24 different brands with a hefty £5,690 charge. You might think this is new, but… it’s just another chapter in the long and winding road of British taxation.
The policy is part of a broader plan to push drivers towards electric vehicles (EVs) by widening the gap between the taxes levied on EVs and those on petrol, diesel, and hybrid cars. This isn’t the first time we’ve seen such moves; it’s just that this time, the stakes are higher.
The High Cost of Luxury
Brands like Ford, Toyota, BMW, Mercedes, Audi, Porsche, and even the likes of Range Rover, Bentley, and McLaren will witness selected models swept up in these changes. These aren’t just any cars; they’re the ones that come with a hefty price tag—often over £40,000—and now, with the luxury car tax surcharge, it’s going to get even pricier.
For instance, buying a Ford Puma could see its first-year VED cost leap from £220 to £440. But for a Range Rover, the initial year’s duty would jump from £2,745 to an astounding £5,490—yes, you read that right.
And by April 1, 2026, it’s expected to rise even further to £5,690. It’s not just a bump; it’s a full-blown tax hike.
The EV Advantage
Meanwhile, those choosing electric vehicles (EVs) will continue to benefit from VED exemptions. The government is clearly trying to encourage the shift towards greener options, but at what cost? For some, this might just be another burden on their already hefty monthly bills.
It’s not all doom and gloom for EV owners, though.
The Chancellor announced that the first-year rates will be changed to widen the difference between zero-emission vehicles and those with internal combustion engines. While it might seem like a small step, it could have significant implications for the market in the coming years.
Long-Term Consequences
The new rules mean that EV buyers will pay just £10 for their first year’s VED, while cars producing between 111g and 150g/km of CO2 face a £220 charge. Those exceeding 255g/km are hit with an even steeper first-year fee of £5,490, which will rise to £5,690 by April 1, 2026.
For context, a Chevrolet Corvette Stingray emits 378g/km, putting it in the highest tax bracket. That’s almost double what you’d pay for an electric vehicle.
But remember, this isn’t about fairness; it’s about pushing a certain agenda. And as always, it comes at the cost of consumer choice and wallet.
The policy also extends 100% First Year Allowances for zero emission cars and EV charge points for another year. This is a double-edged sword: on one hand, it supports the growth of electric vehicles; on the other, it penalizes those who choose to stick with conventional options.
The Reality Check
So, what does this mean in practical terms? Well, if you’re planning to buy a luxury car or an EV, your decision is already heavily influenced by these taxes. But for the rest of us, it’s just another headache.
The government claims it’s all about creating a cleaner environment and reducing our carbon footprint. But let’s be honest—this move is more about revenue than anything else.
The real question is: will this policy work? Will it encourage enough people to switch to EVs or will they just pay the higher taxes and continue driving their beloved cars? Only time will tell, but for now, one thing is certain—the car market in Britain is about to get a whole lot more expensive.
