This year Britain's drivers are being hit with several new rules and changes, one of which is due to hit them financially. One of the changes is alterations to the expensive car supplement that will rise to £50,000 for electric cars from April this year.
Confirmed in the Budget last year, this change will see an increase in the Vehicle Excise Duty (VED) Expensive Car Supplement (ECS) threshold for electric cars. This threshold will rise from £40,000 to £50,000 and could have a major impact on motorists.
Speaking to Reach about the changes to the ECS, Go Compare Motoring Expert Steve Ramsey warned drivers of some of the financial consequences of the decision.
Steve said: "The 'expensive car supplement' cliff edge means that, if your car costs over £40,000, you'll pay an extra £410, at current rates, for each of the next five years.
"That's over £2,000 extra that you don't pay on a car with a list price of £39,995. So, watch out, as just upgrading the trim on your new car could be very costly. And don't think negotiating a discount with the dealer will help, as it's the list price that counts, not the price you paid."
However, it isn't just electric cars that will be hit by the higher car tax bands but petrol and diesel cars too, especially more premium models. What's more, high first year VED tax rises also apply to vehicles on a sliding scale depending data about vehicle emissions.
For example, cars producing between 226 and 225g/km of fuel will pay around £4,850 per year to use the roads, £170 higher than before.
Labour confirmed the rates will increase. In a statement exchequer secretary Dan Tomlinson explained: "Different rates apply to cars, vans, and motorcycles, and the rate for each vehicle is calculated according to a range of factors, such as its date of first registration, weight, or CO2 emissions.
"As announced by the government at Budget, from 1 April 2026, VED rates for cars, vans, motorcycles and heavy goods vehicles (HGVs) will be uprated in line with the Retail Price Index (RPI) in 2026-27."
The increases have proved controversial given the rising costs of living and driving as well as the worsening pothole crisis on the roads. All things considered, Britain's motorists are feeling more and more out of pocket.
The changes will hit people who drive older cars that can sometimes require more maintenance than newer cars. In response, a new Parliamentary petition has been launched calling for the introduction of a new VED tax band to cover cars between the ages of 20 and 39.
Under the suggestion, cars in this age window would see a 50 percent "Transition to Historic" reduction in their VED. The hope is that this would encourage people to keep their old cars rather than scrap them and get new ones, one that could have a potentially positive environmental impact.
The petition proposed: "Introduce a 50% VED reduction for cars aged 20-39. High taxes force functional vehicles to be scrapped, creating a "disposable" culture.
"Keeping existing cars is greener than building new ones, as it preserves embedded carbon. This "Young-Timer" bracket supports the circular economy and UK heritage."
Responding to the petition on February 23, the Government concluded in their response: "While there are no current plans to reduce VED for cars aged 20 to 39 years, the Government keeps all taxes under review, and the Chancellor makes decisions on tax policy at fiscal events."
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