Andy Burnham’s new £430 car tax rule change - starts in April 2027

Andy Burnham will introduce new Vehicle Excise Duty (VED) car tax bands from April 1 2027, with motorists set to pay hundreds of pounds to get behind the wheel. VED fees are mandatory charges paid by almost every petrol, diesel and electric car owner in the UK, with total fees dependent on the age of a vehicle and its overall emissions. VED rates were always set to rise, with the charge going up based on the Retail Price Index (RPI) inflation every April.

Cars first registered between 2001 and 2017 are placed into one of 13 vehicle tax bands based on their pollution levels, with motorists falling into Band J set to be impacted. Vehicles in Band J emit between 186 and 200/km of CO2 and mostly cover larger family cars, older executive saloons, mid-to-large SUVs, and some performance hatchbacks.

According to experts at Pete Barden, rates for owners in this category will rise from £410 per year to £430 per annum, a £20 increase. It’s higher than the additional costs owners were forced to pay earlier this year, when Band J rates increased by £15 from £395 to £410.

Over the 2024/25 tax year, owners were paying just £385 in Band J, with bills sitting at £365 the year before and £330 between 2022 and 2023. Just five years ago, between 2021 and 2022, these rates were as low as £315 per annum, with owners facing over a £100 rise in half a decade.

Older cars are facing rises across the board, with high-polluting models in Band M, emitting over 255g/km of CO2, the most affected.

These owners are staring down the barrel of an £825 per year VED charge, up £35 from the current £790 fee. It’s not just older models, with the standard VED rates for cars registered after 2017 tipped to increase from £200 to £210 per annum next Spring.

In a report published after the Autumn Budget, the Treasury said: “The government will uprate VED rates for cars, vans and motorcycles in line with the Retail Prices Index (RPI) from 1 April 2027.”