Certain drivers will be affected by a new car tax rule change from April 1, 2026. Expensive Car Supplement charges are set to be updated from the Spring with an extra £10,000 leeway for electric car owners.
Currently, motorists have to pay the additional £425 charge on any vehicle with a list price of over £40,000 for a period of five years, but thresholds will rise to £50,000 in a matter of weeks. The extra charge only used to be paid out by the most costly petrol and diesel vehicles, but the expensive nature of brand-new EVs is catching out families. It means many ordinary family electric cars from brands such as Hyundai, Skoda, Tesla and BMW are exceeding the £40,000 cutoff.
It has led policymakers to change the rules, with EV owners now only set to pay extra fees for models priced above £50,000.
The RAC explained: "The Expensive Car Supplement currently applies to all cars with a list price in excess of £40,000. Applying from the second year the car is first registered, it adds an extra £425 per year on top of the standard rate for five years.
"From April 2026, the list price threshold at which electric cars are subject to the tax increases from £40,000 to £50,000, meaning a lot more buyers of new EVs can avoid the charge. The lower £40,000 barrier will continue to apply to all petrol, diesel and hybrid models, however."
According to HM Revenue and Customs (HMRC), the new policy is set to cost the exchequer £50million between 2026 and 2027.
Officials stressed the measure will "positively impact individuals who purchase or own an EV first registered from 1 April 2025".
HMRC added: "The change applies retrospectively, meaning that most vehicles registered from 1 April 2025 will not be required to pay the charge. Any vehicles taking out a second licence with effect before 1 April 2026 will be required to pay one year of the charge only.
"A further legislative change also ensures that all vehicle licences which first have effect on or after 1 April 2026 are subject to the increased threshold, regardless of when the licence is applied for."
-
Union Budget 2026 : What does the budget have to do with our health? Learn detailed information with 6 important points
-
Increase immunity with jaggery! Stay safe from seasonal flu and infections
-
President of India Droupadi Murmu inaugurates Amrit Udyan at Rashtrapati Bhavan ahead of public opening
-
Budget 2026: What is the secret behind the President’s curd-sugar ritual? It’s not just tradition, this is the reason
-
Union Budget 2026: Finance Minister’s announcement to benefit content creators, create lakhs of jobs in AVGC sector
