The automotive sector is still a bedrock of the UK economy, but the environment in which motorists operate is changing rapidly. With the Labour administration putting the final touches to a new Road Safety Strategy and the DVSA working to improve the process of the driving test, 2026 promises to be a transition year. From changes to EV tax brackets to updated requirements regarding emissions and online protection for young motorists, it is imperative to stay up to date to avoid penalties.
Fuel Duty and Vehicle Taxes – What will Happen
For more than a decade, drivers in the UK have enjoyed the benefit of a fuel duty freeze. Yet, after the last Autumn Budget announcement, the government reaffirmed that the fuel duty freeze, which has been in place since 2011, will come to an end in September 2026. At the moment, the standard rate on both petrol and diesel stands at 52.95 ppl, which includes the temporary 5ppl reduction rate. However, come September 2026, the 5ppl surge will come to an end, with fuel duty being aligned to inflation.
Company car drivers shall also be impacted by the changes in Benefit in Kind tax rates for BiK. BiK rates are dependent upon the $CO_2$ emissions of the vehicle and are for cars acquired using salary sacrifice schemes. After the initial 1% rise in April 2025, the rates are set for a further rise of 1% during the financial year 2026-27. What’s more, the specific rate for electric cars shall increase from the current 3% to 4% from April 6th, 2026. These rates continue to escalate with an increasing number of $CO_2$ emissions up to a maximum of 37% for vehicles with over 154g/km of $CO_2$.
Electrified and Luxury Vehicle Incentives/Restrictions
In a very encouraging development for the EV industry, the government is tweaking the Expensive Car Supplement (ECS), commonly known as the “Luxury Car Tax.” In the past, this tax was levied on cars that cost above £40,000. But from April 1, 2026, the new minimum zero-emission vehicle pricing will see the charge-free threshold extend to £50,000. This means that 51% of new EVs will pay less tax compared to 37% currently, while 59% petrol and diesel cars are tax-free compared to 55% currently with a new minimum pricing of £40,000 for petrol and diesel cars as well as hybrids.
On the other hand, the Motability scheme has faced some restrictions. Until late 2025, luxury car brands like BMW, Audi, and Mercedes, as well as coupes and convertibles, were removed from the scheme. The purpose of this service is to focus on British-built cars. In addition, starting from July 2026, a 20% VAT rate is imposed on cars that need an Advance Payment, and a standard 12% rate is used for most new leases instead of Insurance Premium Tax (IPT). Nevertheless, Wheelchair Accessible Vehicles (WAVs) remain VAT exempt and IPT free.
Urban Driving: Congestion Charges & Emission Norms
The drivable environment in London faces higher charges in 2026, with congestion charges rising. The charge-to-drive in London on a single day and access on that day will increase from £15 to £18, in contrast to current charges of £17.50 in three days, which will increase to £21. The most important aspect, however, is that the 100% Cleaner Vehicle Discount Scheme expires on Christmas Day in 2025. Beginning in 2026, those EV users subscribed to Auto Pay will get a 25% discount, reducing the charge to £13.50, as compared to a 50% discount of £9 in both electric LCV and HGV.
On a larger platform, the UK will conform to the Euro 7 emission norms, which will begin from November 29th, 2026. Introduced to significantly modify air quality in the region, this legislation pertains to the Euro 6 emission norms which were implemented in 2015. Starting this period, new cars and delivery van models sold in the region must comply with these new emissions policies.
The Future of Driving Tests and Learners
The DVSA has set the stage for massive reforms in the process involved in acquiring a driving license. As of Spring 2026, the system will provide a new aspect that will regulate the use of third-party robots to buy driving test slots en masse. As if that were not enough, the driving instructors will also not be able to book test appointments for their pupils, while there shall also be a limit to the number of times a candidate can switch their test appointments.
Furthermore, the “Driving Theory Test” is also set to incorporate “life-saving techniques.” From “early 2026,” a set of questions “on CPR (Cardiopulmonary Resuscitation) and the use of an ‘AED’ (Automated External Defibrillator)” has to be included as “compulsory.” While it will not add to the “cost or test time,” it is hoped that it will help improve “cardiac arrest survival chances in the UK by making motorists equipped to respond to emergencies on the roads.”
Future Outlook: Pay-Per-Mile and Self-Driving
Moving forward to April 2028, a novel Electric Vehicle Excise Duty, known as eVED, will be introduced by the government. The “pay per mile” regime will require electric vehicle owners to pay 3p a mile, and for plug-ins, it is 1.5p per mile, to be recorded through an annual MOT check. This is integrated into the VED structure to counterbalance the impact of lost fuel duty revenues with a reduced reliance on fossil fuels.
Finally, the coming age of autonomous travel is soon to arrive. With the signing of the Automated Vehicles (AV) Act in 2024, cars that can drive on their own could be on UK roads as of 2026. Autonomous cars have to go through stringent standards to ensure that their level of competence is equal to that of human drivers to be considered safe to be on the road.
Improving Legislation for Road Safety
The upcoming Road Safety Strategy promises to usher in the most draconian traffic regulations within the last few decades. The most important proposals are that all drivers above the age of 70 will be required to undergo an eye test as part of their three-yearly license renewal. Efforts are also being made to lower the alcohol limit from 80mg to 50mg of alcohol in every 100ml of blood to match the metric of Scottish guidelines. Offenders of seatbelt offenses may also receive three points on their license, aside from the current £500 fine. Well, if you are looking for a place from where you will get a proper guidance regarding these changed and new rules and regulations, you can get in touch with Drive Professional Driving School. Stay assured that choosing them will never go wrong.
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