Buying a new car in the UK in 2026 means budgeting for more than the showroom price, insurance and fuel or charging. Vehicle Excise Duty, usually called VED or car tax, changed significantly for electric cars from April 2025, and the rates rose again from 1 April 2026. That matters most to buyers who still assume a new EV comes with zero road tax.
For the 2026–27 tax year, the system still depends on a car’s CO2 emissions, registration date and original list price. The biggest change for many buyers is simple: electric cars are now inside the VED system, while higher-priced cars can also face an annual supplement after their first year.
How new car tax works in 2026
For cars first registered on or after 1 April 2017, the first year car tax is based on official CO2 emissions. After the first year, most cars move to the standard annual rate, which is £200 for the 2026–27 tax year.
The first-year charge can vary dramatically. A zero-emission car registered from 1 April 2026 pays £10 in its first year. A petrol, diesel or hybrid model with higher emissions can cost hundreds or even thousands of pounds more before it leaves the first year of ownership.
VED rates 2026 for new cars
For cars first registered from 1 April 2026, the first-year rate starts at £10 for vehicles producing 0g/km of CO2. The next bands are £115 for 1–50g/km, £135 for 51–75g/km, £280 for 76–90g/km, £365 for 91–100g/km, £405 for 101–110g/km, £455 for 111–130g/km and £560 for 131–150g/km.
Higher-emission cars face much steeper charges. The first-year rate is £1,410 for 151–170g/km, £2,270 for 171–190g/km, £3,420 for 191–225g/km, £4,850 for 226–255g/km and £5,690 for cars emitting more than 255g/km.
These figures make CO2 output a real buying-cost issue rather than a minor detail. Two cars with similar purchase prices can have very different on-the-road costs simply because they fall into different first-year VED bands.
Electric car tax UK buyers need to understand
Electric cars are no longer exempt from VED. The change began on 1 April 2025 and applies to both new and many existing zero-emission vehicles. For an electric car first registered on or after 1 April 2025, the first-year rate is £10 under the 2026–27 rules, followed by the £200 standard annual rate.
Electric and zero-emission cars registered between 1 April 2017 and 31 March 2025 also pay the £200 standard rate in 2026–27. This is why an EV buyer comparing monthly finance payments should not assume road tax remains free simply because the car has no tailpipe emissions.
The expensive car supplement can add £440 a year
VED can become significantly more expensive when the car’s original list price crosses the expensive-car threshold. For petrol and diesel cars, the threshold remains above £40,000. From 1 April 2026, the threshold for zero-emission cars rises to above £50,000, and the change applies to qualifying zero-emission cars registered from 1 April 2025 onwards.
The supplement is £440 per year on top of the standard rate and is charged from the second to the sixth year after first registration. That means a qualifying car can cost £640 a year in VED during those years when the £200 standard rate and £440 supplement are combined.
The important detail is that the test is based on the car’s list price, not the discounted price you negotiate with the dealer. Optional equipment can also matter if it pushes the official list price over the relevant threshold.
A practical example before you sign the order
Imagine you are choosing between two new electric cars in 2026. One has a list price of £48,500 and the other is £51,500. Both pay £10 in first-year VED, but the more expensive model can fall into the zero-emission expensive-car supplement rules. From its second year, that difference can add £440 annually for the applicable supplement period.
That is why buyers should ask the dealer for the exact list price used for VED purposes before adding wheels, trim upgrades or option packs. A relatively small increase in specification can create a much larger ownership-cost difference over several years.
What about hybrids and low-emission cars?
Hybrids do not receive a separate discounted standard VED rate under the current post-2017 system. Their first-year tax depends on CO2 emissions, so a plug-in hybrid with a low official figure may sit in one of the lower first-year bands, but after that it normally moves to the same £200 standard rate as other cars.
Buyers should also be careful with diesel cars. A new diesel that does not meet the required Real Driving Emissions step 2 standard can be charged as if it were in the next higher first-year VED band.
How to budget for car tax before buying
Do not compare cars using the monthly finance payment alone. Check the official CO2 figure, first-year VED, standard annual rate, original list price and whether the expensive-car supplement applies. For a factory order, recheck the figures after adding options because the final specification may change the relevant list price.
It also helps to separate the first-year charge from later ownership costs. Dealers often include first-year VED in the on-the-road price, which can make it less visible, but years two onward are still your responsibility.
Frequently asked questions
Do electric cars pay road tax in the UK in 2026?
Yes. Electric cars are now subject to VED. New zero-emission cars registered from 1 April 2026 pay £10 in the first year and then the £200 standard annual rate under the 2026–27 rules.
What is the standard VED rate in 2026?
For cars in the post-April 2017 system, the standard annual rate for 2026–27 is £200. Some higher-priced cars also pay the £440 expensive-car supplement during the relevant years.
How much is first year car tax in 2026?
It depends on CO2 emissions. Rates range from £10 for zero-emission cars to £5,690 for new cars emitting more than 255g/km of CO2.
Does a dealer discount reduce the expensive-car tax threshold?
No. The expensive-car supplement is based on the car’s list price for VED purposes rather than the discounted amount you actually pay, so options and specification can affect eligibility.
Budget beyond the purchase price
The new car tax UK 2026 rules make VED harder to ignore, particularly for EV buyers and anyone considering a car near the expensive-car threshold. The safest approach is to check the exact emissions figure and list price before ordering, then calculate both the first-year bill and the likely cost from year two onward. A few minutes spent checking VED can prevent an unpleasant surprise after the excitement of buying a new car has worn off.