New analysis from Marshall Motor Group shows more than 426,000 cars have been caught by the Government’s ‘luxury car tax’ in the past year.
The findings come as the Chancellor prepares to raise the threshold for electric vehicles from £40,000 to £50,000 in April 2026.
Freedom of Information data from the DVLA shows vehicles paying the Expensive Car Supplement rose from 299,553 in 2022 to 426,758 in 2024, a 42% rise in two years.
The threshold was introduced in 2017 to target premium models, yet the data shows it increasingly applies to popular, everyday cars as hybrid and electric vehicles become more common and safety technology raises vehicle prices.
More than 119,000 EVs costing £40,000 or more were registered between April and September 2025, generating more than £50 million a year in supplement revenue.
EVs became liable for Vehicle Excise Duty in April 2025, including the £425 annual supplement from year two.
From April 2026, the threshold for EVs will rise to £50,000 while remaining at £40,000 for petrol, diesel and hybrid cars.
Marshall Motor Group’s Ben Welham said: “The FOI data shows just how many modern cars have ended up above the £40,000 threshold. These are vehicles that many drivers wouldn’t consider ‘expensive’ by today’s standards. The threshold rise to £50,000 for EVs is a sensible update.”
Hybrid models remain the most common fuel type affected, rising from 116,568 in 2022 to 247,613 in 2024, with many family SUVs now exceeding the tax threshold.
Diesel models in the bracket have more than halved as drivers move to electrified options.
Welham said the £10,000 increase reflects market reality and makes the transition to electric more accessible for drivers deterred by tax costs.
EVs hit by ‘luxury car tax’ appeared first on Energy Live News.