Car tax in 2026 looks different from a few years ago, mostly because electric cars now pay Vehicle Excise Duty just like everyone else. Here is what you actually pay and why.
Quick answer: Vehicle Excise Duty (VED) in 2026 is an annual road-tax charge. New cars pay a first-year rate based on CO2 emissions, then a flat standard rate from year two. Since April 2025 electric cars pay VED too, ending their old exemption. Exact figures change yearly, so confirm them on GOV.UK, and keep your running costs low with the fuel cost calculator.
What is Vehicle Excise Duty (VED)?
Vehicle Excise Duty, commonly called car tax or road tax, is the annual charge for using a vehicle on public roads in the UK. It is separate from fuel duty, which is baked into the pump price. The amount you pay depends mainly on:
- When the car was first registered.
- Its official CO2 emissions, for the first-year rate on newer cars.
- Whether its list price was above the expensive-car threshold when new.
- The fuel type, though the gap between types has narrowed significantly.
The system has three broad bands of car depending on registration date, which is why two similar-looking cars can be taxed quite differently.
How VED rates work in 2026
For cars registered from April 2017 onwards, the structure is two-stage:
- First-year rate. Charged once, based on the car's CO2 emissions. The cleaner the car, the lower this charge; high-emitting cars pay considerably more in year one.
- Standard rate. From the second year, almost every car moves to a single flat annual rate, regardless of emissions.
On top of that sits the expensive car supplement for vehicles with a high list price when new.
| Stage | Applies to | Basis | Notes |
|---|---|---|---|
| First-year rate | New cars, year one | CO2 emissions | One-off, higher for dirtier cars |
| Standard rate | Most cars, year two on | Flat amount | Same for petrol, diesel and EV |
| Expensive car supplement | List price above the threshold | Extra flat amount | Added for several years on top of standard rate |
| Older car bands | Cars registered before April 2017 | Emissions bands or engine size | Different, older system |
Because the government reviews these amounts each year, this article deliberately avoids quoting exact pounds that would soon be out of date. Always confirm the current figures on the official GOV.UK vehicle tax pages before budgeting.
Cars registered before April 2017
Older cars follow earlier systems. Vehicles registered between March 2001 and April 2017 are taxed in CO2-based bands, while cars registered before March 2001 are taxed by engine size, with a split around 1549cc. These bands carry on as before.
The big change: electric car road tax in 2026
The headline shift is that electric cars are no longer exempt. From April 2025 onwards, EVs pay Vehicle Excise Duty, and that remains the position through 2026.
What this means in practice:
- New electric cars pay a first-year rate, currently set at the lowest band, then move to the standard rate from year two.
- Electric cars registered earlier have also been brought into the standard rate rather than paying nothing.
- The expensive car supplement now catches many EVs, because electric models often have a list price above the threshold.
The change does not make electric cars expensive to tax compared with petrol and diesel; it simply ends the special zero rate. EVs still benefit from far lower fuel and running costs, which is where the real savings sit over the life of the car.
How car tax fits into your total motoring costs
VED is just one line in your annual motoring budget. To see the full picture it helps to think of the main running costs together:
- Car tax (VED). A fixed annual charge, paid yearly, six-monthly or monthly.
- Fuel or charging. Usually the biggest variable cost, and the one you can most influence by shopping around.
- Insurance. An annual or monthly premium that varies by car and driver.
- Servicing, tyres and MOT. Predictable maintenance you can plan for.
Of these, fuel is where smart habits make the most difference month to month. While VED is fixed once you know your band, your fuel spend depends heavily on where you fill up.
To keep that side under control:
- Use the map to find the cheapest fuel near you before each fill-up.
- Run trip costs through the fuel cost calculator so you can budget accurately.
- If you drive between towns regularly, compare two areas to fill up where it is cheapest.
- Check fuel prices by city and the national fuel price dashboard to spot regional bargains.
Should the EV tax change put you off going electric?
Not really. Paying VED brings electric cars into line with everyone else, but it does not wipe out their advantages. EVs still tend to cost far less per mile to run, and home or off-peak charging is usually much cheaper than petrol or diesel. The tax change is a modest fixed cost set against ongoing savings.
If you are weighing up petrol, diesel or electric, the smart approach is to total the lot: tax, fuel or charging, insurance and maintenance, over the years you expect to keep the car. For the fuel and charging side, our tools make the running-cost comparison straightforward.
Quick checklist for car tax in 2026
- Find out when your car was first registered to know which system applies.
- Check whether you are on a first-year or standard rate.
- See if the expensive car supplement applies to your vehicle.
- Remember EVs now pay VED, so factor it in for electric cars too.
- Confirm the exact current amounts on GOV.UK before you pay.
The bottom line on VED in 2026
Car tax in 2026 is more even-handed than before: electric cars now pay their share, while the two-stage first-year and standard-rate structure carries on for newer cars. The amounts are reviewed yearly, so always check the official figures rather than relying on old numbers.
Car tax is fixed once you know your band, but your fuel bill is not. Open the map to find the cheapest fuel near you, and check the national fuel price dashboard to keep the biggest running cost under control.
Frequently Asked Questions
Do electric cars pay road tax in 2026?
Yes. Since April 2025, electric cars pay Vehicle Excise Duty like petrol and diesel cars, ending the previous zero rate for EVs. Most pay the standard annual rate after the first year.
What is VED and how is it calculated?
Vehicle Excise Duty, or car tax, is an annual charge to use a vehicle on UK roads. For newer cars the first-year rate is based on CO2 emissions, then a flat standard rate applies from year two.
How much is the standard car tax rate in 2026?
There is a single standard annual rate that applies to most cars from their second year onwards, with rates reviewed each year. Check the official GOV.UK figures for the exact current amount.
What is the expensive car supplement?
Cars with a list price above the threshold (around 40,000 pounds) pay an extra yearly supplement on top of the standard rate for several years. This now applies to many electric cars too.
Does paying car tax affect my fuel costs?
No, VED and fuel are separate. Car tax is a fixed annual charge while fuel duty is built into the pump price. Both add to your total motoring costs, so it helps to track them together.
How can I cut my overall motoring costs in 2026?
Choose an efficient car, keep on top of servicing and tyre pressures, and shop around for fuel. Use the Fuel Near You map and fuel cost calculator to keep your running costs down.