Reeves Unleashes Car Tax Hike: Drivers Set to Pay More for Every Mile

Paul Riverbank, 2/8/2026Road tax rises with inflation from 2026, while a new mileage charge for electric vehicles arrives in 2028. The government aims for fairness and simplicity, ensuring all drivers contribute to road funding as green policies reshape Britain’s motoring landscape.

Let's start with the immediate news: the Treasury recently confirmed that VED rates for cars, vans, and motorcycles won't stay put—they’ll move upwards with inflation. That means, whether you’re pottering around in a 2014 Fiesta or managing a small delivery fleet, expect your car tax bill to climb. How much it climbs is still tethered to the specifics: the year your vehicle was registered and how polluting the engine is will be decisive.

Despite recent chatter, there's no major shakeup to the VED framework itself coming just yet. Treasury minister Dan Tomlinson put that to rest, stating plainly, "The Government has no current plans to review this structure." For most motorists, that’s a sign to keep an eye on their bills but not worry about a sea change in how those bills come together.

But let’s not confuse 'no major change' with 'nothing to see here.' The government’s gaze is trained squarely on the horizon, and it’s there you spot the bigger switch—the coming of Electric Vehicle Excise Duty, or eVED. Announced during last year’s Autumn Budget, eVED is set for launch in April 2028, and if you drive an electric or plug-in hybrid, you’re in the crosshairs. The details: electric cars, 3p per mile; plug-in hybrids, 1.5p per mile—a rate that, by the way, can rise as inflation ticks upward.

There’s been old-fashioned speculation over whether motorists might be required to fit trackers or wrestle with a brand new tax system. For now, you can breathe easy. The Treasury is clear: there’ll be no intrusive hardware, no extra bureaucratic hurdles. The eVED is built to slide into the current VED setup, not replace it—drivers will pay for mileage alongside existing car tax, with both figures appearing on the same straightforward bill.

In fact, the government is asking for input on the final shape of eVED, outlining, in the consultation documents, that rates are intentionally pegged to be half the equivalent fuel duty for electric cars, and slashed again for plug-in hybrids. That’s a gentle nudge—a way, perhaps, of ensuring EV owners help shoulder the burden of keeping the UK’s road network ticking while still rewarding the greener choice.

A few more tweaks are queued up. From April 2025, owners of electric vehicles will start contributing to VED like everybody else. Another notable update: the Expensive Car Supplement, which has long added a surcharge to vehicles over £40,000, will soon apply only to models costing over £50,000—meaning fewer drivers of upper-midrange electric saloons and SUVs will get hit with that particular sting.

Why all this fine tuning? Chancellor Rachel Reeves was explicit: the goal is balance. As electric vehicles multiply, a system based on petrol and diesel duty brings in less revenue and seems less fair to fossil-free motorists. The changes aim to keep Britain's roads maintained and the tax system proportionate, as the makeup of the nation’s cars grows greener with each year.

For drivers, this isn’t a moment to panic—but it is a time to keep your eye on evolving costs. Yes, your road tax is set to climb bit by bit. Yes, new charges for clean(er) vehicles are on the way. But contrary to rumor, these reforms are aiming for simplicity, not upheaval. Still, as the road ahead changes, one thing is certain: whether petrol, diesel, or electric, we’ll all soon pay our share to keep the tarmac smooth beneath our wheels.

If you’re a driver in the UK, the phrase “car tax” might soon ring a little differently. The rules for Vehicle Excise Duty—VED to those who read the small print on their annual bill—are shifting, with changes on the horizon that will touch just about anyone who sits behind the wheel. We’re not talking sweeping reforms just yet, but there are adjustments worth noticing, especially as April 2026 approaches.Let's start with the immediate news: the Treasury recently confirmed that VED rates for cars, vans, and motorcycles won't stay put—they’ll move upwards with inflation. That means, whether you’re pottering around in a 2014 Fiesta or managing a small delivery fleet, expect your car tax bill to climb. How much it climbs is still tethered to the specifics: the year your vehicle was registered and how polluting the engine is will be decisive.Despite recent chatter, there's no major shakeup to the VED framework itself coming just yet. Treasury minister Dan Tomlinson put that to rest, stating plainly, "The Government has no current plans to review this structure." For most motorists, that’s a sign to keep an eye on their bills but not worry about a sea change in how those bills come together.But let’s not confuse 'no major change' with 'nothing to see here.' The government’s gaze is trained squarely on the horizon, and it’s there you spot the bigger switch—the coming of Electric Vehicle Excise Duty, or eVED. Announced during last year’s Autumn Budget, eVED is set for launch in April 2028, and if you drive an electric or plug-in hybrid, you’re in the crosshairs. The details: electric cars, 3p per mile; plug-in hybrids, 1.5p per mile—a rate that, by the way, can rise as inflation ticks upward.There’s been old-fashioned speculation over whether motorists might be required to fit trackers or wrestle with a brand new tax system. For now, you can breathe easy. The Treasury is clear: there’ll be no intrusive hardware, no extra bureaucratic hurdles. The eVED is built to slide into the current VED setup, not replace it—drivers will pay for mileage alongside existing car tax, with both figures appearing on the same straightforward bill.In fact, the government is asking for input on the final shape of eVED, outlining, in the consultation documents, that rates are intentionally pegged to be half the equivalent fuel duty for electric cars, and slashed again for plug-in hybrids. That’s a gentle nudge—a way, perhaps, of ensuring EV owners help shoulder the burden of keeping the UK’s road network ticking while still rewarding the greener choice.A few more tweaks are queued up. From April 2025, owners of electric vehicles will start contributing to VED like everybody else. Another notable update: the Expensive Car Supplement, which has long added a surcharge to vehicles over £40,000, will soon apply only to models costing over £50,000—meaning fewer drivers of upper-midrange electric saloons and SUVs will get hit with that particular sting.Why all this fine tuning? Chancellor Rachel Reeves was explicit: the goal is balance. As electric vehicles multiply, a system based on petrol and diesel duty brings in less revenue and seems less fair to fossil-free motorists. The changes aim to keep Britain's roads maintained and the tax system proportionate, as the makeup of the nation’s cars grows greener with each year.For drivers, this isn’t a moment to panic—but it is a time to keep your eye on evolving costs. Yes, your road tax is set to climb bit by bit. Yes, new charges for clean(er) vehicles are on the way. But contrary to rumor, these reforms are aiming for simplicity, not upheaval. Still, as the road ahead changes, one thing is certain: whether petrol, diesel, or electric, we’ll all soon pay our share to keep the tarmac smooth beneath our wheels.