Vehicle Excise Duty UK 2026/27: EV, Petrol and Diesel Rates Compared

Vehicle Excise Duty (VED), commonly known as road tax, changed significantly from April 2025. Electric vehicles lost their long-standing exemption and are now subject to VED for the first time. In 2026/27, both EV and internal combustion engine (ICE) drivers need to understand exactly how much VED they owe and when the expensive car supplement applies.

Electric Vehicle VED from April 2025

Before April 2025, zero-emission electric vehicles were completely exempt from VED. That exemption ended. From 1 April 2025 onward, all EVs registered on or after that date are subject to the following:

• First year rate: GBP 10 (a nominal rate, reflecting zero tailpipe CO2)
• Subsequent years: Standard annual rate (GBP 195 in 2026/27)

For EVs registered between 1 April 2017 and 31 March 2025, the first year rate was GBP 0 when new, but from April 2025 they move onto the standard annual rate (GBP 195).

For EVs registered before 1 April 2017, different legacy rates apply.

The Expensive Car Supplement

If a car -- regardless of fuel type -- has a list price above GBP 40,000 when new, it attracts the expensive car supplement. This additional charge of GBP 570 per year applies for years 2 through 6 of the vehicle's registration.

This is particularly significant for EV owners, as many popular electric models -- including popular family SUVs and premium saloons -- exceed the GBP 40,000 list price threshold.

Example: an EV costing GBP 55,000 new

• Year 1 VED: GBP 10
• Years 2 to 6: GBP 195 (standard) + GBP 570 (supplement) = GBP 765/year
• Year 7 onward: GBP 195/year

Over the first six years of ownership, this EV costs GBP 10 + (5 x GBP 765) = GBP 3,835 in total VED.

Petrol and Diesel VED: First Year Rates

For new petrol and diesel cars registered from 1 April 2017, first-year VED is based on the vehicle's official CO2 emissions:

From year two onward, all petrol and diesel cars move to the standard annual rate of GBP 195, regardless of emissions. This flat structure (from year two) means a large petrol SUV pays the same annual VED as a small city car after the first year.

Standard Annual Rate 2026/27

The standard annual VED rate for most cars from their second year is GBP 195. This applies to:

• Petrol and diesel cars
• Electric cars
• Hybrids (with some variation for older registrations)

Alternative fuel vehicles (AFVs) -- including mild hybrids and plug-in hybrids -- may attract a reduced rate; check the DVLA's latest schedule at gov.uk/vehicle-tax-rate-tables.

When Does the Expensive Car Supplement End?

The GBP 570 supplement ends after five years of payment (years 2 to 6 from first registration). From year 7 onward, you pay only the standard annual rate -- GBP 195 in 2026/27, though this is typically uprated by RPI annually.

Note: the supplement is based on the original list price when new, not the current market value. A second-hand car purchased for GBP 25,000 can still attract the supplement if it cost GBP 45,000 new, depending on the age of the vehicle.

Company Car VED

VED on a company car is normally the employer's responsibility, not the employee's. However, Benefit in Kind (BIK) tax -- charged on the employee through payroll -- is a separate and distinct charge based on the car's P11D value and CO2 emissions percentage. VED is not included in the BIK calculation.

Vehicles Exempt from VED

Certain vehicle categories remain exempt from VED regardless of the 2025 reforms:

• Historic vehicles (more than 40 years old, from 1 April each year)
• Disabled tax class vehicles (for those receiving certain disability benefits)
• Agricultural vehicles (tractors and other qualifying farm machinery)
• Mobility scooters
• Certain ex-military vehicles

How to Pay VED

VED is paid through the DVLA. You cannot legally drive an untaxed vehicle on UK roads. Payment options include:

• Annual (one payment, cheapest overall)
• Six-monthly (single payment at 55% of annual rate -- a modest surcharge)
• Monthly direct debit (equivalent to 105% of annual rate -- the most expensive option)

For example, at the standard GBP 195 annual rate:

• Annual: GBP 195
• Six-monthly: GBP 107.25 (GBP 214.50 if you pay twice)
• Monthly: GBP 16.25/month = GBP 195/year (but billed as 105% = GBP 204.75 effective if using the direct debit surcharge)

VED and Electric Van Drivers

Vans and pickups have their own VED structure, separate from cars. Electric vans benefit from a lower VED rate than diesel equivalents. From April 2025, electric vans are taxed at the "light goods vehicle" rate, which is lower than the car standard rate. Check the DVLA tables for the current light goods rates.

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Use the CalcHub Car Tax Calculator to calculate the total VED cost for your vehicle over the first six years of ownership, including the expensive car supplement.