There has been an increase in confusion about UK ‘road tax’ in recent months, much of it driven by headlines suggesting older cars and modern classics are about to face dramatic increases from April 2026. The reality is a little more straightforward and hopefully, we can shed some light.
There was a time when “car tax” meant a small round paper disc in the corner of the windscreen. You queued at the Post Office, handed over a cheque, peeled it from its perforations and slotted it into a plastic holder. If it was there and in date, you were legal. Simple.
That system disappeared in 2014, replaced by a digital record that most of us barely think about — until headlines suggest something dramatic is about to change.
Vehicle Excise Duty is not being redesigned. There is no blanket reclassification of older cars into higher tax bands. What is happening is the routine annual uprating of rates — expected to be in line with inflation (RPI) — from 1 April 2026.
The 23 March 2006 divide
For cars registered between 1 March 2001 and 23 March 2006, VED is based on CO₂ emissions. However, these cars sit under an earlier version of the band structure.
Under the current GOV.UK rate table (2025/26):
- Band K (over 225g/km, registered before 23 March 2006): £430 per year
For cars registered on or after 23 March 2006, the upper bands are higher:
- Band L (226–255g/km): £735 per year
- Band M (over 255g/km): £760 per year
That means two mechanically similar cars — one registered on 22 March 2006 and one on 24 March 2006 — can have significantly different annual tax bills purely because of their registration date.
This is not a new rule. It has existed for nearly 20 years. What is happening now is that cars from that period are reaching modern-classic status, and the tax gap is being rediscovered.
What is actually changing in April 2026?
From 1 April 2026, Vehicle Excise Duty rates are expected to be uprated in line with inflation (RPI), as they are most years.
What that means:
- The price attached to each band may increase modestly.
- The bands themselves are not changing.
- A car does not move into a higher band simply because rates are uprated.
So if your car is currently in Band K, it will remain in Band K. It will not suddenly become a Band L or M car.
While the exact 2026/27 figures will be confirmed when the official rate table is published, inflation-linked uprating typically results in increases measured in tens of pounds — not hundreds.
Pre-2001 cars: a different system entirely
Cars registered before 1 March 2001 are taxed under the older engine-size system:
- Engines over 1549cc: £360 per year (2025/26 rate)
- Engines 1549cc or below: lower rate
That structure remains in place and is not being replaced in April 2026.
Vehicle Excise Duty – Historic vehicles remain exempt
Vehicles more than 40 years old, registered in the Historic tax class, continue to qualify for £0 VED, despite all the speculation on social media that this was due to be rescinded. There is no announced change to the 40-year rolling exemption as part of the April 2026 uprating, and our partners, the Federation of Historic Vehicle Clubs (FBHVC), are working to ensure that remains the same.
Why does the confusion keep resurfacing?
As 2000s-era cars become affordable modern classics, buyers often compare a 2005 example with a 2006 or 2007 example and discover a substantial annual tax difference.
That discovery can feel like a “new” tax shock — but it is simply the continuation of a band structure introduced in 2006. As the rise in interest for modern classics continues, this appears to be hitting the headlines more often.
Headlines suggesting that cars are about to be “dragged into higher tax bands” tend to misunderstand this point. Uprating changes the annual amount payable. It does not reclassify vehicles.
If you are unsure what applies to your vehicle, the only definitive answer comes from checking your registration against the official DVLA vehicle tax service.
In short, there is a long-standing divide in the system, and some high-emissions post-2006 cars are expensive to tax. But there is no sudden, system-wide re-banding of older vehicles happening in April 2026.
The structure is staying the same. The numbers are simply being updated.
