Cars from 24 manufacturers face huge first-year VED tax from April 2026, affecting high-emission vehicles from brands including Ford, BMW, Mercedes and Toyota
10:23, 31 Jan 2026Updated 08:24, 01 Feb 2026
People buying new premium marque cars which have a high pollution level will be hit with a massive first year tax charge from April(Image: Getty)
A grand total of 59 vehicles spanning 24 different manufacturers, featuring household names like Ford, BMW and Mercedes, will be subject to a £5,690 levy come April 1. This hike follows sweeping changes to Vehicle Excise Duty (VED) rates introduced last year, which saw certain models face an eye-watering £2,745 jump.
The Government opted to significantly raise first-year VED charges for petrol and diesel motors from April 2025 onwards. These are considerable sums paid by buyers of brand-new vehicles before reverting to the standard rate thereafter.
The increases have been implemented on a graduated basis, with the upper bands seeing fees roughly double compared to 2024 figures. Motors producing in excess of 255 g/km of CO2 bore the brunt of the £2,745 increase, affecting some of Britain’s most popular vehicles on the road.
First-year charges climbed to £5,490 – with a further rise to £5,690 anticipated from April 1 2026. Mainstream marques including Ford and Toyota will see select models caught up in the changes. BMW, Mercedes and Audi ranges will similarly feel the impact.
Luxury brands will bear the heaviest consequences of these adjustments. Vehicles from Porsche, Lotus, Lamborghini and McLaren number amongst those facing the new charge.
Chancellor Rachel Reeves unveiled the measure as a means to encourage motorists towards electric vehicle purchases and widen the gap between ‘higher polluting’ motors and EVs. The initial year’s tax liability is calculated based on the volume of carbon dioxide a vehicle produces.
Presently, those opting for electric vehicles (EVs) enjoy exemption from Vehicle Excise Duty (VED), whilst motors releasing between 111g and 150g/km of CO2 incur a £220 levy.
Vehicles surpassing 255g/km face an even heftier inaugural year charge of £5,490 – a figure poised to climb further. Amendments introduced last April saw EV purchasers paying a token £10 for their maiden year’s VED – a sum which has lately been held steady.
By comparison, motorists behind the wheel of petrol, diesel, and hybrid automobiles are preparing for a substantial hike as these charges are scheduled to double.
A Treasury representative confirmed exclusively to Car Dealer Magazine that come April 2025, acquiring new motors such as a Ford Puma could see the first-year VED expense double from £220 to £440. For premium marques like a Range Rover, the inaugural year’s duty would surge from £2,745 to an eye-watering £5,490 – with a further increase to £5,690 on the cards.
Chancellor Rachel Reeves declared in her Budget address: “To help drive the transition to electric vehicles the government is strengthening incentives to purchase EVs by widening the differentials in Vehicle Excise Duty First Year Rates between EVs and hybrids or internal combustion engine cars.
“The government is also maintaining EV incentives in the Company Car Tax regime and extending 100% First Year Allowances for zero emission cars and EV charge points for a further year.”
The Budget document provided more detail on vehicle taxation, explaining: “Vehicle Excise Duty first-year rates are paid for the first year of a car’s lifecycle, at the point of registration, and vary based on emissions.”
At the point of registration, and vary based on emissions. “It further detailed plans stating: “From 1 April 2025, the Vehicle Excise Duty first-year rates will be changed to widen the difference between zero-emission, hybrid and internal combustion engine cars.
Expected first year car tax rates from April 1, 2026.
0g/km – Remains at £10.
1-50g/km – Rising from £110 to £115.
51-75g/km – Rising from £130 to £135.
76-90g/km – Rising from £270 to £280.
91-100g/km – Rising from £350 to £365.
101-110g/km – Rising from £390 to £405.
111-130g/km – Rising from £440 to £455.
131-150g/km – Rising from £540 to £560.
151-170g/km – Rising from £1,360 to £1,410.
171-190g/km – Rising from £2,190 to £2,270.
191-225g/km – Rising from £3,300 to £3,420.
226-255g/km – Rising from £4,680 to £4,850.
Over 255gkm – Rising from £5,490 to £5,690.
After first year will pay standard rate – expected to be £200 (currently £195).
A full list of models emitting over 255 g/km has been released.Audi RS6 4.0 TFSI V8Audi S8 4.0 TFSI V8McLaren GT 4.0T V8Audi R8 5.2 FSI V10Lamborghini Huracan 5.2 V10Chevrolet Corvette Stingray 6.2 V8Volkswagen Amarok 3.0 TDIAston Martin DBX 4.0 V8Ferrari Roma 3.8T V8Audi SQ7 4.0 TFSI V8Range Rover Sport 4.4P V8Jaguar F-Pace 5.0 P575 V8Aston Martin DB12 4.0 V8Porsche 911 3.7T 992 TurboJeep Wrangler 2.0 GMEFord Ranger 2.0 TD EcoBlueAudi RSQ8 4.0 TFSI V8Lotus Emira 3.5 V6Bentley Continental 4.0 V8Audi SQ8 4.0 TFSI V8Aston Martin Vantage 4.0 V8Toyota Hilux 2.8DPorsche Macan 2.9T V6Mercedes-Benz SL55Range Rover 4.4 P530 V8Mercedes-Benz AMG GT 4.0 V8Porsche 718 Cayman 4.0 GT4Lamborghini Urus 4.0 V8 BiTurboAudi RS7 4.0 TFSI V8Ford Mustang 5.0 V8Toyota Land Cruiser 2.8DBentley Continental 6.0 W12Mercedes-Benz GLC63Ford Ranger 3.0 V6INEOS Grenadier 3.0PRange Rover 4.4 P615 V8Land Rover Defender 90 5.0 P425 V8Rolls-Royce Ghost 6.75 V12Ford Ranger 3.0 EcoBlueMercedes-Benz G63Ferrari Purosangue 6.5 V12Rolls-Royce Cullinan 6.75 V12Alfa Romeo Stelvio 2.9 V6 Bi-TurboMercedes-Benz GLE63Maserati Levante 3.0 V6Porsche Cayenne 4.0T V8BMW M8 4.4 V8Maserati MC20 3.0 V6Land Rover Defender 110 5.0 P425 V8Mercedes-Benz G400DLamborghini Revuelto 6.5 V12Bentley Bentayga 4.0 V8BMW X7 M 4.4 V8BMW X6 M 4.4 V8BMW Alpina XB7 4.4 V8Bentley Flying Spur 4.0 V8Maserati Levante 3.8 V8BMW X5 M 4.4 V8Mercedes-Benz GLS63hCars costing more than £40,000 attract VED luxury car tax surcharge.
Motors priced above £40,000 when purchased brand new (factoring in additional extras) will face an additional annual levy of £425 (up from £410) beyond the standard yearly VED car tax charges, applicable from years one through to six of ownership.
Those who’ve splashed out more than £40,000 on a new motor (extras included) will be hit with an additional £425 charge over a five-year period, commencing when the vehicle is taxed for its second year. By the time your motor reaches its sixth birthday, you’ll have shelled out an extra £2,125 in tax.
Come 1 April 2026, the bar for the so-called “luxury car tax” (that £425 premium) will shift upwards to £50,000 for electric vehicles, whilst petrol and diesel motors will remain pegged at the £40,000 mark.
For those behind the wheel of a cherished older model or simply a dependable run-around registered prior to March 2001, your levy is calculated using VED engine capacity bands rather than CO2 output. The updated charges are as follows:
New distance-based levy for electric and hybrid motors.
Come April 2028, electric motors will face a fresh ‘distance-based levy’ designed to compensate for the absence of fuel duty revenue from these vehicles. Starting April 2028, motorists will be charged the equivalent of 3p for every mile travelled in battery electric vehicles and £0.015p per mile for plug-in hybrid vehicles.
According to the Chancellor, revenue raised will support highway upkeep. This rate will climb each year in line with the Consumer Price Index. Currently, there’s no confirmed structure detailing how this measure will be rolled out or the payment mechanism for drivers.
It’s estimated to add roughly £300 for every 10,000 miles covered in an electric vehicle. John Cassidy, sales managing director at Close Brothers Motor Finance, commented: “A pay-by-mile scheme for electric vehicles risks increasing costs for many drivers, particularly those who rely on their cars for higher annual mileage.
“With energy bills rising and public charging becoming more expensive, motorists will fear that EV ownership could end up being significantly more expensive than traditional ownership.”
Pricey car levy increased for EVs.
Introduced back in 2017, the Expensive Car Supplement imposes an additional £425 annually over a five-year period after the first tax payment on new vehicles exceeding £40,000 in value.
The Budget has now seen that ceiling lifted to £50,000 specifically for electric vehicles, which means purchasers of EVs beneath this figure will be spared from paying the Expensive Car Supplement.
Vehicles exceeding 40 years of age.
The longstanding 40-year classic car tax exemption remains unchanged. Should your motor have been manufactured over four decades ago, it falls within the ‘historic vehicle’ category and attracts zero VED charges.
Likewise, road tax exemptions for disabled motorists remain unaffected – those who qualify will continue to receive full exemption from these increases.
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