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Car Tax Hike: Thousands Squeezed by New VED Rates
1 Apr
Summary
- First-year tax for high-emission cars now £5,690.
- 5% of new car trims face the highest tax band.
- VED rates doubled to deter polluting vehicle purchases.
From April 1, 2026, car tax rates have significantly increased, with owners of new high-emission vehicles facing a first-year "showroom tax" of up to £5,690. This steep rise applies to models with CO2 emissions exceeding 255 grams per kilometre, impacting roughly 5% of all new car trims available.
The Chancellor doubled first-year Vehicle Excise Duty (VED) rates approximately 12 months prior. While ostensibly a green initiative to promote electric vehicle adoption, the policy disproportionately affects those purchasing new petrol and diesel cars.
Examples of affected models include luxury brands like Aston Martin, Bentley, Ferrari, Lamborghini, and Rolls-Royce. However, relatively more attainable vehicles such as the Alfa Romeo Stelvio Quadrifoglio, Ford Mustang, Ineos Grenadier, Jeep Wrangler Rubicon, Land Rover Defender V8, Porsche Macan S/GTS, and Toyota Land Cruiser diesel also fall into the highest tax bracket.
These vehicles, registered from April 1, 2026, will incur substantial first-year VED costs. For instance, the Ford Mustang's £5,690 tax is equivalent to 10.8% of its entry price, highlighting the significant financial burden imposed by the new tax structure.
