Rachel Reeves confirms new £225 charge for drivers

 Motorists are paying up to £225 to use the roads due to a new car tax fee introduced by Rachel Reeves. The Chancellor oversaw the introduction of a series of new car tax fees from April, with prices up across the board.

Petrol, diesel and electric car owners are all facing new costs, with cars registered between 2001 and 2017 are among those affected. Cars registered between these years are placed into one of 13 tax bands dependent on overall vehicle emissions. Cars in tax band F, emitting between 141 and 150g/km of CO2 are now paying £225 to use the roads.

This is up £10 on the £215 charged to road users in this category over the 2025/26 tax year, and up £15 on the £210 slapped on motorists between 2024/25.

Cars in this category include popular hatchbacks, compact family SUVs, and economical estates. Cars in the next band, emitting between 151 and 165g/km of CO2 pay a lot more, with bills now standing at £275 per year.

VED is a legal requirement, meaning road users must get their car taxed every year in order to stay on the roads. VED can be paid upfront every 12 months, or motorists can split their bills into instalments, but could be charged more.

Motorists can pay for their car tax online in a matter of minutes. However, those without access to the internet can tax a vehicle over the phone or in person at the Post Office.

Road tax charges increase every year in line with inflation so that prices keep up pace with real-time values.

Late last year, HM Revenue and Customs explained that the April 2026 increase was a simple inflationary rise in line with the Retail Price Index (RPI).

HMRC said: "As announced at Budget 2025, the Government will introduce legislation in Finance Bill 2025-26 to uprate Vehicle Excise Duty rates for cars, vans and motorcycles in line with the Retail Price Index (RPI) for 2026 to 2027. This will take effect from 1 April 2026."