UK Car Tax April 2026: VED Rises, the £50K EV Supplement Threshold, and BiK Changes

What changed on 1 April 2026

Three things, and one of them is genuinely good news for EV buyers.

1. The standard rate rose to £200 (from £195). This applies to almost every car registered since April 2017, of every fuel type, including electric.

2. The Expensive Car Supplement rose to £440 a year (from £425), payable in years two to six.

3. The ECS threshold for electric cars jumped from £40,000 to £50,000 — and, crucially, applied retrospectively to EVs registered on or after 1 April 2025.

That third change is worth several thousand pounds to a very large number of drivers.

The Expensive Car Supplement, explained properly

The ECS — universally called the "luxury car tax" — adds £440 a year on top of the standard rate for five years, starting from the second year of the car's life. So the total annual VED for an affected car is £640.

Over five years, that is £2,200.

The thresholds now:

• Petrol, diesel, hybrid: £40,000
• Fully electric: £50,000

Here is why the EV change mattered so much. When EVs lost their VED exemption in April 2025, they became liable for the ECS at the £40,000 threshold — and the SMMT has estimated that over 70% of new car models have a list price above £40,000. The average price of a new electric car in the UK is around £48,000.

In other words: the "luxury car tax" was hitting the majority of ordinary family EVs. The threshold was catching a Volkswagen ID.4 Match Pro, a Skoda Enyaq, and many specifications of the Tesla Model Y — the best-selling car in Britain, and by no stretch of the imagination a luxury item.

Raising the threshold to £50,000 exempts most of them. If you bought a £45,000 EV in, say, June 2025, you were expecting to pay £2,200 in supplements. You now pay nothing.

The trap nobody warns you about

It is the list price that counts. Not what you paid.

This catches people constantly, so read this twice:

• The ECS is based on the manufacturer's list price, including any factory-fitted options, at the time of first registration.
• A discount does not help you. If a car lists at £52,000 and you negotiate it to £48,000, you still pay the supplement.
• Options can push you over. A £48,500 EV with a £2,000 options pack is now a £50,500 car, and you have just bought yourself £2,200 of tax.
• It follows the car, not the owner. Buy a used car that listed above the threshold when new, and you inherit the remaining supplement years.

The practical advice, and it is worth real money: if your EV configurator is showing you a total between roughly £49,000 and £52,000, go back and remove options until you drop under £50,000. A metallic paint choice can cost you £2,200.

First-year rates: the other half of the story

The first-year "showroom tax" is based on CO2 and is where the government is actually raising money.

| CO2 (g/km) | First-year rate | |---|---| | 0 (EVs) | £10 | | 1–50 | £115 | | 51–75 | £135 | | 76–90 | £280 | | 91–100 | £365 | | 101–110 | £405 | | 111–130 | £455 | | 131–150 | £560 | | 151–170 | £1,410 | | 171–190 | £2,270 | | 191–225 | £3,420 | | 226–255 | £4,850 | | Over 255 | £5,690 |

That top band rose by £200 (from £5,490), and it affects around 60 models — from Land Rover Defenders to Lamborghinis to the Ford Mustang. A typical petrol car at 143g/km pays £560 in year one.

Diesel cars not meeting RDE2 standards pay a band higher.

The gradient here is deliberate and steep. The jump from 150g/km (£560) to 151g/km (£1,410) is a £850 cliff for one gram of CO2. Manufacturers engineer to sit just below it, which is exactly the point.

Company cars: BiK rises to 4%

From 6 April 2026, the Benefit-in-Kind rate for fully electric company cars rose from 3% to 4%.

Keep this in perspective. It is a rise, and it will rise further in coming years. But an EV company car at 4% BiK remains dramatically cheaper than a petrol equivalent, which can sit at 25–37%. Salary sacrifice on an EV remains, comfortably, the single most tax-efficient way to drive a new car in Britain.

The one on the horizon: eVED

The Autumn 2025 Budget announced a pay-per-mile tax on electric and plug-in hybrid cars from April 2028 — dubbed eVED.

• EVs: 3p per mile
• PHEVs: 1.5p per mile
• Charged on top of existing VED
• Self-reported, with annual mileage checks (via MOT for cars over three years old)

At the government's stated average of 8,000 miles a year, that is roughly £240 extra for an EV driver. At 10,000 miles, it is £300.

We cover this in full in our separate piece on road pricing. For now, the point is that the April 2026 changes should be read as a waypoint, not a destination. The direction of travel is unmistakable: as fuel duty revenue falls, electric drivers will pay more.

Quick reference: what you'll pay in 2026/27

| Situation | Annual VED | |---|---| | EV under £50,000, year 2+ | £200 | | EV over £50,000, years 2–6 | £640 | | Petrol/diesel under £40,000, year 2+ | £200 | | Petrol/diesel over £40,000, years 2–6 | £640 | | EV registered before April 2017 | £20 | | Car over 40 years old | £0 (exempt) |

• Standard VED rose to £200; the Expensive Car Supplement rose to £440
• The EV threshold for the supplement rose from £40,000 to £50,000, applied retrospectively to April 2025
• It is the list price, not the discounted price, that determines liability
• Company car BiK for EVs rose from 3% to 4% on 6 April 2026
• A pay-per-mile eVED tax (3p/mile for EVs) is scheduled for April 2028

Key takeaways

• Standard VED rose to £200; the Expensive Car Supplement rose to £440
• The EV threshold for the supplement rose from £40,000 to £50,000, applied retrospectively to April 2025
• It is the list price, not the discounted price, that determines liability
• Company car BiK for EVs rose from 3% to 4% on 6 April 2026
• A pay-per-mile eVED tax (3p/mile for EVs) is scheduled for April 2028