UK Vehicles Tax Changes Coming in April 2026: What you need to know

From April 2026, several changes will come into effect for UK drivers. Whilst none are huge on a lower level, these costs could prove significant for fleets of all sizes. For those choosing a new company car or an electric vehicle, it’s worth considering the impact now. 

We’ve compiled the key changes below and how these could impact you.

Standard Road Tax Increase to £200

From 1, April 2026, the standard rate of Vehicle Excise Duty (VED) will increase in line with inflation from £195 a year to £200. 

This is for most cars first registered after April 2017. The standard rate applies to the majority of cars once they go beyond their first tax year including Petrol, Diesel, Plug-In Hybrid variants and Electric Vehicles. 

The increase will come into effect when you come to renew a car after April 2026.

On its own, £5 does not sound like an extreme uplift but with mounting pressures on fleets and drivers across fuel, maintenance and insurance, these increases will come to bite. 

Electric Cars Reprieve: Luxury Car Tax Threshold to rise to £50,000

There is good news if you are looking at an electric car though, the threshold for the Expensive Car Supplement, the extra amount charged to higher priced vehicles will increase from £40,000 to £50,000 before it impacts buyers. 

Buyers currently have to stomach an extra £425 a year for five years on top of the standard VED rate but the move from £40,000 to £50,000 should help many. 

To recap, from April 2026:

EVs with an original price (P11D Value) of less than £50,000 will avoid the extra cost with those above set to pay the supplement. 

Electric Company Cars: Benefit-in-Kind (BiK) increases to 4%

From 6 April, 2026, the BiK will rise from three to four percent on electric company cars. Benefit-in-Kind on electric vehicles is still minimal compared to their petrol counterparts but it does mean drivers will see a slight increase in monthly costs. 

The exact cost of BiK for a driver is dependent on the car's P11D value. If you are looking at Plug-In Hybrid Vehicles it's worth considering the tax changes that are already biting PHEV drivers.

What tax changes will impact van drivers? 

Standard Vehicle Excise Duty will remain flat for Van drivers. For most vans in the N1 category (under 3,500kg) there will be no change to the current tax set rate of £345 annually. Since last year, electric vans have had to pay the same flat rate after being exempt prior. 

Van Benefit in Charge changes are coming

If you have a company van in which you can use for personal journeys, the Van Benefit Charge is increasing. From 6 April, 2026 the VBC will go up from £4,020 to £4,170 per year. Van Fuel Benefit Charge shifts from £769 to £798 per year if an employer provides fuel for private use. 

EV LCVs remain exempt with no taxable benefit for private use. 

What's coming in 2026?

We will see fuel duty phased back in after being frozen since 2011. This will increase in phases from September 2026 so it’s worth considering now for fleets looking to take out new vehicles. 

- 1p per litre from 1 September 2026
- 2p more from 1 December 2026
- Another 2p from 1 March 2027

What should fleet operators be doing right now? 

From April 2026, these changes will have a big impact on fleets, it’s important to get ahead of the curve on key decisions which could impact your cost centres. There’s never been a better time to assess how switching to electric vehicles could bring down these costs. 

At Driveway Vehicle Solutions, we support fleets through these sorts of changes providing up to date modelling and vehicle selection guidance. We’re not here to push electric vehicles but to find the right solution for fleets use case to ensure the best possible experience for end users and decisionmakers. 

If want free agnostic support for your fleet whether it’s two vehicles or 500, we can support you through these changes. Reach out today.