Motorists with electric cars valued at over £40,000 could also be liable for an Expensive Car Supplement (ECS) rate at an extra £425.
The government has been urged to raise the expensive car supplement threshold to £50k. Motorists with electric cars valued at over £40,000 could also be liable for an Expensive Car Supplement (ECS) rate at an extra £425.
A new Parliament website petition urges: “Raise the expensive car supplement, also known as the “luxury car tax” threshold from £40,000 to £50,000 to better reflect current car prices and help ensure fairness for ordinary buyers.”
The petition adds: “We feel that the £40,000 threshold, set in 2017, no longer reflects modern car prices. We think many standard vehicles now fall within this range, unfairly subjecting ordinary families and individuals to additional taxes originally intended for high-end luxury cars.
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“We believe raising the threshold to £50,000 would address this imbalance and would help prevent overtaxing regular buyers.” Caroline Sandall-Mansergh, consultancy and channel development manager at Alphabet, has also called for the ECS thresholds to rise by at least £20,000.
She said: “I don’t believe the current threshold of £40,000 is at the right level. Based on a review of Alphabet’s data relating to 3,508 quotable vehicle models, our view is that it should be raised to £60,000.”
At 100,000 signatures, this petition will be considered for debate in Parliament. The expensive car supplement is an additional fee that’s payable in years two to six of the car’s life for vehicles with a list price of £40,000 or more.
It’s important to note that it applies to the total list price of the car, so it will include any optional extras added to a sub-£40k car, and won’t be removed if you get a discount on a £40k-plus vehicle.
The expensive car supplement rate is £410 a year for the five years following the first tax payment that’s made when the car is a year old. That’s on top of the standard second-year-onwards rate of £190 – which means you’ll be paying £600 a year if you buy a car that costs upwards of £40,000, until the car is six years old.