Luxury Car tax - Sorry to repeat a previous thread

[markp4200]

I am sorry to be addressing a previous point, but I can't find the topic of the luxury vehicle tax as raised in the chancellor's recent budget, and as mentioned somehwhere on this forum.
I will shortly (I hope) be taking delivery of a long range IM5.
I am still confused about the levy of the tax when it will be increased from £40K threshold to £50K threshold, from April 1st to £425 on top of the standard £195. If I look at the government's website it seems that in registering a car this December (or even January 2026), the car WILL be subject to the additional tax. Yet, in some places I have seen that cars up to £50K and registered after April 2025 and up to April 2026 will remain exempt from the added £425.

I suspect it's just an age-thing, but I am a poor confused old man!
Can anyone claify please?
My sincere thanks. Mark

 

[MG Clive]

Is this the thread you've seen > Expensive car suplement

 

[markp4200]

Thank you MG Clive, that is exactly what I saw.
I think I can rest comfortably.
Mark

 

[LenEV2016]

You will not need to pay it

 

[markp4200]

Thanks LenEV2016
Mark

 

[tsedge]

Vehicles registered on or after 1st April 2025 will have the £50,000 threshold applied. The additional supplement tax is due from Year 2 onwards, so these vehicles were not due to pay the tax until 1st April 2026.

It is the registration date that matters, not when the car was made or when you bought it, so that needs to be checked (is on the V5).

 

[markp4200]

Thank you tsedge.
It's good to know some 'sensible thinking' has been going on with the majority of models otherwise being in the luxury car bracket.

 

[tsedge]

Just for those that want it from the horse's mouth:

Increase in the Vehicle Excise Duty Expensive Car Supplement threshold for zero emission cars

www.gov.uk

It is clear that the change is for "second licence", i.e. not in the first year, (which does not attract ECS anyway).

It is clear that it is retrospective from 1st April 2025, although it does say "most" vehicles will not be required to pay the charge, rather than "all", which is somewhat unclear.

My interpretation of this is that IF you choose to pay VED before 1st April 2026 (e.g. because you sell your car to someone else and they have to re-tax it), then they'll be charged for 1 year only at the higher rate (if your purchase price was above £40,000).

Clearly if your car was registered in March 2025, to get the new registration, then you'll still have to pay as that is before the date.

Any other interpretations?

General description of the measure​

As announced at Budget 2025, this measure increases the VED (Vehicle Excise Duty) Expensive Car Supplement (ECS) threshold for zero-emission cars, from its current level of £40,000 to £50,000.

This means that zero-emission cars with a list price which exceeds £40,000, but does not exceed £50,000, will no longer be required to pay the ECS charge when they take out a licence which comes into effect on or after 1 April 2026 which is not a first vehicle licence. The threshold will be maintained at its current level of £40,000 for all other cars.

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.

 

[markp4200]

What a minefield! It sounds just a little like the current government's record.
I am not being political, but they offer us quite a roller-coaster journey. I think it's good thing we are buying these super-smooth IM5's which can even out the bumps.

 

[salty]

It'll not be long before the ICE lot are Whingeing. Aww why can't we have a £50,000 threshold. They moaned we didn't pay Road Tax (VED) They moaned about paying fuel duty. Won't be long before they are Chirping about this.

 

[markp4200]

Should have gone to MG . . . for an electric car!
Apologies to Specsavers

 

[LenEV2016]

Should have gone to MG . . . for an electric car!
Apologies to Specsavers

Remains to be seen yet