Tax bands for cars registered after April 2017 have been confirmed by HM Treasury and the Labour Party government.

06:21, 27 Apr 2026Updated 17:33, 28 Apr 2026

Rachel Reeves confirms £3,420 charge for cars made after April 2017

Rachel Reeves confirms £3,420 charge for cars made after April 2017

Rachel Reeves has rolled out a new £3,420 charge for some motorists – in the form of new tax bands for drivers. Tax bands for cars registered after April 2017 have been confirmed by HM Treasury and the Labour Party government.

One of the bands, for those emitting 191 – 225 CO2 emissions (g/km), will set motorists back a whopping £3,420. And this isn’t even the most expensive, either.

There are two higher bands, working out at £4,850 and £5,690. Cars with a list price of over £40,000 (£50,000 for electric cars) when new pay an additional rate of £440 per year on top of the standard rate, for five years.

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The five-year time limit starts from the second year the car is first registered. The government advises: “You’ll pay a rate based on a vehicle’s CO2 emissions the first time it’s registered.

“This also applies to some motorhomes. You have to pay a higher rate for diesel cars that do not meet the Real Driving Emissions 2 (RDE2) standard for nitrogen oxide emissions.

“You can ask your car’s manufacturer if your car meets the RDE2 standard.” You need to pay tax when the vehicle is first registered, this covers the vehicle for 12 months.

You’ll then pay vehicle tax every 6 or 12 months at a different rate. A duty on motor vehicles has existed in the UK since the early 20th century.

The primary legislation for VED is consolidated in the Vehicle Excise and Registration (VERA) Act 1994. VED rates are usually changed via the annual Finance Bill.

VED raised £8.2 billion in 2024/25. The Office for Budget Responsibility estimates that this figure will increase to £13.3 billion by 2030/31.

How much a vehicle owner pays in VED depends on a number of factors, including the type of vehicle owned, when it was first registered, or its environmental performance.