Electric cars have been subject to road tax since April 2025. Now the “luxury car tax” (officially the Expensive Car Supplement) element of VED is changing. And while car tax in general is edging up slightly, this particular update is a positive step for people choosing electric.
So what’s actually changing?
From 1 April 2026, the price threshold for the luxury car tax on electric vehicles rises from £40,000 to £50,000.
That means:
- EVs under £50,000 won’t pay the extra £425 per year supplement
- This applies for years 2–6 of the car’s life
- The change is retrospective to EVs registered from April 2025
In simple terms: many drivers who would have paid the luxury car tax… now won’t.
Why this matters (especially for real-world EVs)
This update better reflects how people actually use electric cars today.
Right now, a huge number of family-sized EVs sit in the £40,000–£50,000 bracket. Under the old rules, they were classed as “luxury”, even though they’re often the practical, everyday choice for families.
That’s where this change makes a real difference.
Take the Volkswagen ID.4 Match Pro.
With a P11D list price of £44,335 (or £46,335 for the Black Edition), it would previously have been subject to the luxury car tax.
From April 2026, it falls below the new £50,000 threshold, so it no longer attracts the £425/year supplement.
That’s a saving of £425 per year (years 2–6), and for lease customers, it could mean lower monthly costs.
And it’s not just one model.
The Tesla Model Y (one of the UK’s best-selling EVs) also sits in this bracket depending on specification, meaning many versions now avoid the supplement.
The same goes for the Skoda Enyaq, another popular family EV often priced within that range.
- If you’re leasing, this could reduce your monthly cost
- If you’re buying, it removes a key barrier to stepping into a larger or longer-range car
