#vehicle-excise-duty

#vehicle-excise-duty

UK motorists are facing higher vehicle ownership costs after Chancellor Rachel Reeves confirmed changes to Vehicle Excise Duty (VED) that will increase charges from April 2026. The policy, implemented through HM Treasury fiscal reforms, forms part of a wider transition toward emissions-based transport taxation as fuel duty revenues decline. Officials say the system is designed to balance climate targets with long-term funding for road infrastructure. The steepest increases will affect motorists buying high-pollution cars.

Chancellors of the exchequer have long resisted any form of road pricing as politically toxic. That may be about to change next week: Rachel Reeves, perhaps inured to being pilloried for any money-raising proposal, is expected to introduce a charge explicitly linked to how far EVs drive. The Treasury has all but confirmed some kind of charge will be announced at next week's budget,

Taxing Britain's SUVs in line with other European countries could raise almost 2bn a year for the public finances, research has shown. The Transport & Environment thinktank has urged the government to use the autumn budget to bring in a levy on the largest vehicles, which it said would reflect the damage they caused to the environment and infrastructure.