UK Driving Law and Car Tax Changes in 2026/27: What Drivers Need to Know

Road tax and motoring cost changes in 2026

For some drivers, the biggest concern isn't new regulations; it's whether motoring is getting more expensive.

Using fuel comparison apps integrating the government's 'Fuel Finder' service and fuel loyalty schemes can help consumers maximise their savings.

Car tax changes from 1 April 2026

• Car tax rates changed from 1 April 2026, with updates affecting standard annual rates, first-year tax for new cars, electric vehicles and the Expensive Car Supplement.
• New cars in their first taxation year must pay between £10 and £5,690 upfront (depending on their emissions level) to cover the 'showroom tax'.
• For most older cars registered on or after 1 April 2017, the standard annual rate changed to £200 per year for 2026/27 (an increase of £5 from the 2025/26 rate).
• Electric cars are now part of the Vehicle Excise Duty system, meaning most EV owners now pay car tax depending on when the vehicle was first registered. The Expensive Car Supplement has also increased to £440 per year, with a higher threshold now applying to electric cars.

Company car tax updates from April 2026

• Company car Benefit-in-Kind (BiK) rates changed from 6 April 2026, with electric and ultra-low emission company cars seeing further scheduled increases.
• For 2026/27, the headline change is that zero-emission electric company cars move to a 4% BiK rate, while ultra-low emission cars under 75g/km CO₂ also rise by 1%. The overall BiK cap remains 37%.
• Electric company cars still usually attract a lower BiK rate than petrol and diesel models, but the tax advantage is gradually narrowing as rates continue to rise over the coming tax years.

This is only a summary of the main 2026/27 tax changes. For the full breakdown of current rates, registration dates, EV rules, first-year tax bands, the Expensive Car Supplement and BiK rate tables up to 2029/30, read our detailed guide to UK car tax bands.

Fuel duty

As of May 2026, fuel duty has not yet increased. The temporary 5p per litre cut, originally due to expire on 31 August 2026, has been extended until the end of the year.

A phased reversal of the cut, which had been planned to begin in September 2026, has been cancelled. It has not yet been confirmed whether or how the cut will be reversed in 2027.

In simple terms, this means fuel duty will remain at its current reduced rate for the rest of 2026, though what happens beyond that is still unclear.

Motability scheme changes (July 2026)

The next update to the Motability Scheme includes changes to tax relief on insurance and some top-up lease payments:

• From 1 July 2026, the Insurance Premium Tax (IPT) exemption will be restricted.
• IPT relief will apply only to vehicles substantially and permanently adapted for wheelchair or stretcher users — or originally designed for their use.
• Insurance on most other new leases will be subject to IPT at the standard 12% rate.
• VAT relief will also be restricted for some top-up payments on new leases.
• Leases entered into before 1 July 2026 will keep their existing tax treatment.

These changes could increase costs for some customers, although whether and how those costs are passed on is a commercial decision.

Congestion Charge increases and new charges for EVs (launched Jan 2026)

On 2 January 2026, the standard daily London Congestion Charge increased from £15 to £18, while the long-standing full exemption for electric vehicles came to an end.

Transport for London (TfL) replaced the previous 100% Cleaner Vehicle Discount with a new, reduced version, introducing a tiered system instead of a blanket exemption:

• Electric cars: 25% discount (typically £13.50 per day).
• Electric vans, HGVs and quadricycles: 50% discount (around £9 per day).
• Eligibility: Vehicles must be registered with TfL and set up for Auto Pay.

This means EV drivers can still save money compared to petrol and diesel vehicles, but they can no longer avoid the charge entirely.

What about residents?

People who live within the Congestion Charge zone can apply for a residents' discount, which reduces the daily charge by 90%. In simple terms, instead of paying £18, eligible residents pay a much lower daily rate of £1.80 per day.

Self-driving cars and the future of autonomous driving

The UK is moving from testing to real-world trials of self-driving vehicles on public roads.

Since 31 March 2026, companies have been able to apply to run small-scale commercial pilot services using self-driving vehicles without a safety driver.

What it means

• Companies can apply to run taxi- or bus-like services using self-driving vehicles.
• These vehicles can operate without a human safety driver as part of approved pilot schemes.
• Services will be limited in scale and tightly regulated as part of pilot schemes.
• Some services may be available to the public via apps during trials.

What it means for drivers

For most drivers, there will be no immediate change. However, you may start to see small numbers of driverless vehicles in specific trial areas as these pilots begin.

Driving licence and testing changes

Confirmed: Practical driving test booking rules

The most significant confirmed change for learner drivers affects how driving tests are booked and managed, with new DVSA rules introduced in phases:

• From 31 March 2026: Only 2 changes allowed per booking (down from 6).
• From 12 May 2026: Only the learner can book and manage their own test using their own GOV.UK account. (Instructors and third parties will no longer be able to do this for them using their own accounts.)
• From 9 June 2026: Changes limited to test centres near the original booking location.

If you need to make more than two changes, you'll have to cancel your test and book again. Booking a test will now require more planning, as flexibility is reduced.

New CPR and defibrillator theory test questions

Driving theory tests are set to introduce first aid content in 2026, with a stronger focus on lifesaving skills.

The DVSA is updating the question bank to:

• Include enhanced CPR (cardiopulmonary resuscitation) content.
• Add questions about defibrillators (AEDs) for the first time.

As of May 2026, there is no confirmed launch date, with changes expected later this year.

Digital driving licences

As of May 2026, digital driving licences are not yet fully available to the public.

The GOV.UK Wallet, which will allow drivers to store a digital version of their licence on their phone, cannot currently be downloaded or used.

Digital driving licences are now in testing and early rollout phases, with wider availability expected later in 2026.

For now, drivers must continue to use their physical photocard driving licence.

Potential law changes from the Government’s road safety strategy

It’s important to note that the changes outlined in this section are under consultation and have not yet been confirmed.

They form part of the Government’s Road Safety Strategy, which was announced in August 2025 and formally launched in January 2026. The strategy sets out areas the Government wants to review and improve.

This means the Government is gathering views, details may change, and some proposals may never become law. Others, if approved, are likely to be introduced later.

Minimum learning period for drivers

Status: Under consultation

The Government is consulting on whether learner drivers should complete a minimum learning period, which could be up to six months, before taking their practical test. The aim would be to ensure learners gain experience in a wider range of driving conditions.

Visit the GOV.UK website to learn more about this consultation.

Stricter drink drive limits and alcohol interlock devices for offenders

• The government has consulted on possible changes to drink-drive laws in England and Wales.
• One of the most significant proposals is a reduction in the drink-drive limit in England and Wales, which has remained unchanged since 1967.
• The current limit is 80mg of alcohol per 100ml of blood. This could be lowered, with the consultation also considering whether novice drivers should face an even lower limit.
• Scotland already has a stricter limit of 50mg of alcohol per 100ml of blood.
• The Department for Transport has also consulted on measures to reduce reoffending, including the possible use of alcohol interlock devices.
• Alcohol interlock devices require drivers to provide a breath sample before starting a vehicle and prevent it from starting if alcohol is detected.
• No change has been confirmed, and no implementation date has been set.
• These proposals form part of the wider government review of road safety and motoring offences - and are not yet law.

Changes for learner motorcyclists

The government also consulted on potential changes to motorcycle training, testing, and licensing as part of its wider Road Safety Strategy.

The DVSA consultation includes proposals aimed at improving safety and simplifying how riders progress through licence categories.

However, as of May 2026, no specific rule changes have been confirmed, and the current system remains in place.

Changes for learners, seniors, and driving licence updates

Status: Under consultation

Changes currently under consultation for driving licencing include:

• Mandatory eyesight testing for drivers aged 70 and over.
• Possible cognitive assessments for older drivers.
• Changes to penalties for motoring offences such as uninsured driving and illegal number plates.

Other key changes for 2026

Energy price cap and home EV charging costs

The UK’s energy price cap, set by Ofgem, indirectly affects the cost of charging an electric car at home by limiting how much suppliers can charge for electricity on standard variable tariffs.

From 1 April to 30 June 2026, it has fallen to £1,641, a reduction of around £117 or 7% from the previous quarter. Between 1 January to 31 March 2026, the price cap was set at £1,758 per year for a typical household.

This reflects lower electricity unit rates, meaning home charging costs for EV drivers may fall slightly, depending on usage and tariff. However, the cap does not limit total bills, only the unit price of energy, so actual savings will vary.

Fuel Finder Scheme

The government’s Fuel Finder Scheme launched on 2 February 2026 and helps drivers compare fuel prices using live data.

It requires fuel retailers to share up-to-date pricing data (within 30 minutes of changes) to improve transparency across the market. Drivers can now use fuel comparison apps and online tools powered by this data to find the cheapest petrol and diesel nearby more easily.

New ZEV mandate targets for 2026

The Government’s Zero Emission Vehicle (ZEV) mandate requires manufacturers to sell more electric cars and vans each year. This initiative aims to expedite the adoption of electric vehicles ahead of the scheduled 2030 ban on the sale of new petrol and diesel cars.

Each manufacturer must ensure a minimum percentage of their new car sales are zero-emission (fully electric). The target percentage rises every year. If a manufacturer falls short, they can face financial penalties, unless they offset the shortfall in other approved ways.

In 2026, the target for cars and vans rose to 33% and 16% respectively. You can see the ZEV targets from 2025-30 below: