Major changes will hit some newer cars from April 2026
Motorists across the country could be hit by a new increase in tax charges from April 2026. It comes after the government confirmed that Vehicle Excise Duty (VED) Expensive Car Supplement threshold will increase for zero-emission cars, including electric vehicles (EV).
Currently, the threshold for the VED Expensive Car Supplement, which is often referred to as the ‘luxury car tax’. applies to purchases that cost more than £40,000 for zero-emission cars. However, from April 1, 2026, this will increase to by £10,000, raising the threshold to £50,000.
Because of this rise, motorists who purchase a car between £40,000 and £50,000 will not be required to pay the ECS charge whenever they take out a licence. This Expensive Car VED is typically paid at annual rates and currently stands at £425 a year for the five years following the first tax payment that’s made after the car is one year old.
Previously, many zero-emission cars, including EVs, were exempt from the £195 flat rate that most newer cars are made to pay every year. However, this policy changed on April 1, 2025, resulting in EVs and hybrid cars being subjected to the same rates as petrol and diesel cars.
Despite this, the rising threshold for the luxury car tax will not be raised for petrol and diesel cars in April. Furthermore, most vehicles registered from April 1, 2025, will not be required to pay the charge as the changes will apply retroactively, with any vehicle taking out a ‘second licence’ that comes into effect before April 1, 2026, only paying one year of the charge.
Current car tax bands
The first tax payment based on VED tax rates for cars registered on or after April 1, 2017, will vary depending on the car’s fuel type and emissions rate. For petrol and some diesel vehicles, this can range from £10 for zero CO2 emissions to £5,490 for emissions over 255g/km.
However, the second tax payment onwards is calculated at the following rates for all petrol, diesel, electric, and alternative fuel vehicles:
- Single 12 month payment – £195
- Single 12 month payment via Direct Debit – £195
- 12 monthly payments via Direct Debit – £204.75
- Single six month payment – £107.25
- Single six month payment via Direct Debit – £102.38
At current rates, vehicles with a price list of more than £40,000 need to pay the following rates:
- Single 12 month payment – £620
- Single 12 month payment via Direct Debit – £620
- 12 monthly payments via Direct Debit – £651
- Single six month payment – £341
- Single six month payment via Direct Debit – £325.50
Full details of VED rates can be found on the government website here.


















































