UK car tax changes from April 2026: electric vehicles, the Expensive Car Supplement and 2026-27 VED rates
LONDON · By Teja Pagidimarri · Published May 23, 2026 · 4 min read
From 1 April 2025 electric vehicles lost their Vehicle Excise Duty exemption, and the Expensive Car Supplement now applies to new EVs with a list price above GBP 40,000. The 2026-27 rates inherit the same structure, indexed for RPI. Owners renewing tax from April 2026 see the second-year onward rate at GBP 195 for cars first registered after April 2017.
- Standard annual rate (year 2 onwards)
- GBP 195 for cars first registered on or after 1 April 2017.
- Expensive Car Supplement
- GBP 425 per year for years 2-6 on cars with a list price over GBP 40,000.
- New EV first-year rate
- GBP 10 in year one, then GBP 195 standard rate from year two.
- Pre-2017 cars
- Still on the old CO2-band table - no change in 2026.
What changed at the policy level
The 2022 Autumn Statement set the timeline: from 1 April 2025 zero-emission cars pay VED on the same basis as petrol or diesel. The decade-old exemption is gone, and the Expensive Car Supplement now sweeps in the bulk of new EVs, which routinely list above GBP 40,000. Many electric owners who never paid car tax now face the standard rate, and often the supplement on top.
How Vehicle Excise Duty is structured
Vehicle Excise Duty, known to most drivers as car tax, is the charge for keeping a car on a public road. For any car first registered on or after 1 April 2017 it has two stages: a one-off showroom first-year rate tied to CO2 emissions, then a flat standard rate everyone pays from the second year onward, regardless of emissions.
That split is why the same model can look cheap to tax in year one, then settle onto the GBP 195 standard rate. The older system, for cars registered between 1 March 2001 and 31 March 2017, never moved to a flat rate: those cars stay on graduated CO2 bands for their whole life.
How the Expensive Car Supplement works
The Expensive Car Supplement, often called the luxury car tax, is an extra annual charge on top of the standard rate, triggered when the manufacturer's list price including options was above GBP 40,000 at first registration. The test is that original list price, not what you paid and not the later second-hand value, so a car discounted at the dealer or bought used for less can still carry it.
It applies from the second time the car is taxed through to the sixth year, then drops away. For 2026-27 the supplement is GBP 425 a year alongside the GBP 195 standard rate, so a qualifying car is taxed at GBP 620 a year during that window. If you are weighing running cost against finance, the car loan calculator sets the monthly payment next to the annual tax.
UK VED rates 2026-27 (cars registered after April 2017)
| Fuel / type | Year 1 (first reg) | Standard year 2+ | Expensive supplement |
|---|---|---|---|
| Petrol / diesel >75 CO2 | Variable, GBP 220 - GBP 5,490 | GBP 195 | GBP 425 yrs 2-6 if >GBP 40k |
| Hybrid (alt fuel) | Same scale minus GBP 10 | GBP 185 | GBP 415 yrs 2-6 if >GBP 40k |
| Electric (new) | GBP 10 | GBP 195 | GBP 425 yrs 2-6 if >GBP 40k |
| Electric (already registered) | n/a | GBP 195 from April 2025 | GBP 425 if applicable |
Rates: DVLA vehicle tax rate tables.
How to check what you will pay
Look up the V5C logbook: the first registration date and the published CO2 figure decide which table applies. Cars first registered 1 March 2001 to 31 March 2017 are still on the CO2-band table, with rates from GBP 0 to GBP 735. Anything from April 2017 sits on the flat GBP 195 standard rate plus the supplement where it applies, and DVLA's online vehicle tax checker confirms the exact 2026-27 rate by registration number.
Paying by Direct Debit lets you spread the cost over six months or monthly, but instalments add a 5 percent surcharge, so a single annual payment is cheapest. To see how the tax sits within your budget, the UK take-home salary calculator shows what you keep after income tax and National Insurance, and the UK income tax calculator breaks down the bands.
Frequently asked questions
Do I have to pay road tax on my existing electric car?
Yes, from 1 April 2025. The exemption ended for all electric and zero-emission cars regardless of when they were first registered.
Does the Expensive Car Supplement use the price I paid or the list price?
It uses the manufacturer's published list price (including options) at first registration, not the price you negotiated and not the later second-hand value. If that original list price was above GBP 40,000, the supplement applies in years two to six even if you bought the car for less.
What is the difference between the first-year rate and the standard rate?
For cars registered from April 2017, the first-year rate is a one-off showroom charge based on CO2 emissions, paid only in the year of first registration. The standard rate is the flat amount everyone on this system pays from year two onward, GBP 195 in 2026-27, regardless of emissions.
Can I pay my car tax monthly instead of all at once?
Yes. You can set up a DVLA Direct Debit to pay annually, every six months or monthly. Spreading the cost over instalments adds a 5 percent surcharge, so a single annual payment is the cheapest option.
Teja founded 3tej in 2024 to make multi-country tax and salary math less painful. He builds and maintains the calculators, writes the editorial guides on policy changes, and signs off every rate update before publish.