Andy Burnham’s £140 car tax rule change – starts in April 2027

Andy Burnham is set to oversee new car tax bands from April 2027, with Vehicle Excise Duty (VED) fees set to change. VED charges are mandatory fees paid by almost all petrol, diesel and electric car owners to stay on the road. The rates tend to change every year in line with Retail Price Index (RPI) inflation, with Treasury officials confirming that rates will be updated in 2027.

The news has allowed experts to weigh in on what it all could mean, with specialists from Pete Barden suggesting how much bills could rise. Standard VED fees for cars registered after 2017 are likely to increase from £200 to £210 per annum, with first-year rates and older cars also hit with new bands.

Vans are also in the firing line, with models not meeting early Euro 4 and Euro 5 compliant regulations facing an increase of £15 per year. This is likely to see bills increase from £360 per annum to £375 per year in a blow to cash-strapped owners.

However, the £15 increase is identical to the previous VED rise, with prices increasing from £345 earlier this year. The Treasury said: “The Government will uprate VED rates for cars, vans and motorcycles in line with the Retail Prices Index (RPI) from April 1, 2027.”

But it’s not all bad news, with Pete Barden revealing that vans which do meet Euro 4 and Euro 5 standards, as well as pre-2011 electric vans, will not face any price hikes next April.

Despite increases elsewhere, these rates are expected to remain at the current £140 per year tax charge for another year in a slight boost for motorists already struggling with rising running costs.

Fees were at the £140 level in the 2024/25 tax year, with some van owners able to take advantage of the decision. However, only more modern vans hitting the road within the last 15 years are likely to enjoy the frozen rate.

Euro 5 emissions standards were fitted into most commercial vans manufactured from 2011 onwards.