It’s been 40 thousand pounds for a few years now. Strange how inflation doesn’t affect car prices but is standard on household bills. Another example of government trying to make us all poorer.
All government price-based mandates (especially minimum wage) should be indexed to inflation. Anything less is rank incompetence, which is to say it's typical.
Yep - it’s been cars over £40k since 2017, with no adjustment for inflation 😬 should be about £54k adjusted. The actual name of the tax is ‘expensive car supplement’
@@What-if-I-am-wrong: I drive a BMW iX - if I bought this new after April it would cost another £410 per year in tax 🤣 Could be worse though -those large fuel SUV’s hitting over £5k tax in the first year !
A common tip; if you have a zero tax car, renew in March with a payment of £0; this will keep your renewal date in March in future; this is usually the month before rises come in. At least it will save you several months of tax
@@tobydouglas5826you avoid it anyway. Only new EV cars registered after 1st of April will have the premium tax. You will only pay £195 per year when you re-tax your car after 1st of April
Meanwhile a Citroen Ami will also be charged £195, while an 8 year old diesel car will be taxed at the old rates of £0-£30 depending on emissions. Message received: Stick with the old car and starve the government of VAT revenue on that new car sale.
You've already been robbed because that new EV has already lost half its value. Just check the values on Autotrader for pre registered cars. It's no joke!
It's worth stressing that the 40K cutoff is the manufacturer's list price, including any factory fitted options (e.g. paint!). Any negotiated discount to below 40K won't count.
You want to live in Northern Ireland, the holes are Massive....you never ever see anyone fixing the holes and we have very few fast chargers and our health service is down the tubes
I can imagine that a number of manufacturers will start playing with list prices. I was playing with the configurator for a Kia EV3 GT Line, which when you added metallic paint, raised the price to £40,120 - effectively resulting in an overall cost just short of £2,700 for the paint alone!!
Don’t worry guys in UK, this is still less than what we pay in NL. Till Dec 2024 for Tesla 3 we also didn’t pay a single cent. Now in 2025 will be paying 25€, 2026-2029 75€ and from 2030 100€! Let me be clear, not per year but per month! That sums up to 1200€ a year!!! You are still good …
Similarly the general tax allowances on wages has been the same for years. Currently paying 42% tax for earning over 40,000. Think it was also around 2017/2018 it was last changed. It should be raising with inflation too
This will destroy the new car sales market. Especially for the higher end brands. You work your backside off to buy your dream car and then have to pay 1000’s in tax to drive on roads that look like they have been mortar bombed. This government is an utter joke.
Just move countries, the UK is absolutely f*cked these days. It’s sad to see, but it is in a death spiral and it seems there is no going back. I can see the young and able deserting it in droves for somewhere better, and who could blame them.
@@markbloxham1313 it never matters who came up with a policy if the current government sticks by it. By doing so they condone it and may as well have implemented it themselves.
The premium levy needs increasing… £40,000- £55000 isn’t premium anymore… prices have gone up… this needs adjusting.. totally unfair… like you say, I’m not opposed to paying Road tax for an EV… but not the luxury tax, on a Model 3 which isn’t a luxury car… Ferrari is luxury!! I’m still buying the Long Range Model 3 RWD… this year… just gonna have to stomach the hike in tax.. (wife’s car is up for renewal before mine)…
It's the car prices that have gone crazy and need to be reduced way down. A Golf shouldn't cost 40k+. A GTi should be around 30k. Regular Golfs should be 20k+
In the nicest possible way pal, you’re as much a part of the problem as the policy itself. Don’t know your situation so not judging, but just buying it anyway and taking the hike on the chin is exactly why the government gets away with lunatic policies like this. If the manufacturers weren’t selling the stockpile of +£40K cars, they would, collectively, have sway over the government and could force a change in policy (like upping the luxury penalty)
@@davsan5329 agreed. It's the people buying these overpriced cars that's the problem. That and the way everyone pays for them on finance. Absolute madness!
I’m thinking of buying a 40 year old classic car which will avoid road tax and ULEZ😂. These new rules will slow ALL new car sales over £40k….what a disaster!
The premium tax is already on for combustion cars but from 1st of April it will apply to EV’s as well. If anything it will affect sales of premium new EV’s.
This luxury tax should never been have been introduced in the first place. At the worst it should have been raised each year same as the road tax. As usual we are being ripped off.
Should be called the envy tax! If you have bought a car over £40,000 say £60,000 you will probably have paid more tax than the £40,000 car so in fairness the cheaper car should be taxed more as it hasn’t contributed as much to the tax system as the more expensive one.
Absolute batshit crazy. If its no longer to be based on CO2 emissions, then we should all pay the same, or banded for vehicle weight. As an owner of 3 ICE vehicles, one of which is a transporter, id accept that the transporter would cost more than the Fiat 500 due to damaging the road surface more.
EVs charged off the grid still produce CO2 and other toxins. They've just been relocated to the power stations. Not to give them ideas, but one could argue that all electrical power consumption also produces the same toxins.
To make it clear to everyone, a lot of these changes are not new, but were introduced by Jeremy Hunt in 2022 inc. EVs and VED and the luxury car value at £40k. At the time it was expected half of new cars on the road would be electric. So he changed the rules to come into affect this year.
lol, and the honeymoon is over.... (for those that don't remember leaded vs unleaded, back then the government gave you a bargain until there was enough using unleaded for them to whack the tax up)
Hi Richard, greetings from Oxford. As a BEV owner, I think it is only fair to pay VED, however the algorithm should be encouraging people towards zero emission vehicles. I have a 2019 BMW i3, my partner has a 2015 Audi A3 1.4 petrol. Under the new VED system, I will pay £195 PA for the i3, my partner continues to pay £30 PA for the Audi A3 1.4 petrol. There is no incentive here to switch the A3 for a zero emission vehicle, so we will be keeping it. Not sure this has been thought out!
@@Chris-hy6jyExactly how many EV'S have caught fire and burnt down somebody's house? Hopefully you can provide evidence of your claims, rather than what you heard down the pub, or saw on Facebook or Tik Tok.
There must be a lot of pressure to increase the threshold for luxury status. However, the is some mileage in not doing anything until after April 1st because leaving it could increase the number of sales before the cut-off date.
My MG4 is due for tax March 1st , so I guess I get lucky this year . Prior to buying this I had run x3 BMW's on the trot @£30 pa I wanted to buy another but an 8 month old 120D with the 190bhp engine was going to be £560 to tax so I refused to buy it . On top of that was the traumatic £1.90 a litre diesel during the last shortage , so now I'm electric! The £40k luxury tax is a joke and an obscene mugging by whichever Govt is in power . With the manufacturers rip off apres Covid, most run of the mill cars exceed the 40k . Motorists, we are low hanging fruit !!
it's a bunch of clowns running this country, i expect a rush on pre 2017 small cars with free or £20 road tax.... i.e skoda fabia 1.2 dsg =£20 rfl per year....unless they changing I.C.E pre 17 plates too?
Nope, a diesel 5 series from early 2017 will still be £30 a year. As said above though this crazy policy was cooked up in 2022 by the last lot, though the current lot have chosen to let it continue
Over here in New Zealand EVs started paying a per km tax called Road User Charge (RUC). To give you a bit of background, diesel doesn't have duty at the pump and depending on the type and use of a diesel vehicle they pay different RUC. EVs also don't pay duty at the pump because we charge overnight at home or use public chargers which don't incur duty. To make this "fair" the NZ government introduced RUC for EVs last April at the some cost as a diesel vehicle $76/1000km (£35/621 miles). The Net effect of this is that our running costs when charging overnight at home have increased by 2.5 times. Hybrids pay duty per litre of petrol at the pump, and a hybrid able to do 4L/100km could be paying less than half ($30/1000km | £14/621 miles) of an EV. This means that charging overnight on a cheap EV tariff, it's as cheap to run a Hybrid as an EV. With public charging costing 5x more than home charging a Hybrid is much cheaper when doing road trips. The government has said that it plans to move all vehicles across to RUC and remove duty at the pump eventually, but there has been no date set. I have read that there is the potential for the UK to bring in something similar.
Really don't get this to be honest I have a 5 series diesel which is 30 pounds to tax it's madness that an electric car that's has no emissions at all will cost 600 pounds how does it make any sense
EVs are remote emissions vehicles. Most of those emissions take place in China where they are built, where the power is generated, or where the rare earths are mined.
In Denmark you pay tax every year for your car, but it is based on CO2 emission or equivalent, for most EVs it is the lowest tax rate of about 80£ per year, but for a common SUVs it could be as much as but not linited to 600£
UK system was identical till not so long ago, but then politicians started smelling money. I do believe it is fair EV's start paying at least something, but they're making the rules far too complex and restrictive...
That's how the UK is currently. Based on co2/km. As an ICE owner of 3 vehicles, this hasn't bothered me. I do believe that there should be a minimum though, as EVs are still contributing to the state of the roads. If its no longer to be based on co2 emissions, then all ICE and EVs should pay the same rate, or based on a vehicles weight.
It’s important to note, when buying a brand new car, the dealer/manufacture will pay the first years road tax. Which means all new cars over £40k will be at the same tax rate
@BenKata23 yes it’s very likely, as it’s included in the OTR price. But I should imagine it will be included with discounts on new cars as the market is now back to normal. It’s also important to note that 2024 1st road tax could be up to £2745. So it is increasing a lot (basically 100%), but not as much as it seems (comparing to the £10 first time tax).
Excellent explanation, you may have mentioned that if you buy the M3 at £39995, it will be the cheapest but if you change colour of seats or paint will take it over the list price which it is based on, also you mentioned dear ICE cars, could have mentioned the small petrol (panda, twinge etc) which will be charged the a same.👍
I guess the simple answer is to buy a car that is over 1 year old in all examples, having said that new car prices will have to adjust to compensate for the increased tax or contributions made by dealerships or manufactures otherwise the new car market will stall/collapse.
Actually, the new VED bands were introduced by the previous government, not Labour. Also, Land Rover has not been British owned for a long time, it also has terrible quality issues that it has totally failed to resolve. Like Jaguar, these are lovely cars, let down by poor management and a lack of commitment from the staff who design and build them to make consistent quality vehicles. Such a shame.
Typically used car prices in the UK are much lower than for example in the rest to the EU due to the Left hand drive, what the new tax system will do is reduce demand dor new cars and over time this will reduce supply of used cars increasing valued of used cars. This will reduce risk of car dealers and likely to keep car loans more competitive as there will be less depreciation.
I think this is a big kick in the nuts for the new EV market. 40k is not a luxury vehicle nowadays! I'm currently driving an EV but will be coming out of it soon. I've loved having it but the lack of incentives to run an EV mean I'll just go back to running an older ICE car now
The honeymoon period for EVs is at an end. They know most EVs that are worth having are over 40G What worries me is how they will fill the black hole of fuel TAX. Mark my words, there will be a plan in place.
The thing is, these tax rates will change every year, so the reality is that these figures are misleading! That isn't your fault, of course. It is the government.
Will all the optional features be disabled in software, to bring the price below £40k, then you can add them afterwards, avoiding years of extra tax? BMW heated seats come to mind!
At a minimum that 40k premium car value needs to be adjusted for 20 years of inflation. I think road tax should be flat rate for all vehicles regardless of emissions, use, or even 2 wheels Vs 4. Make it 195 for all cars on the road and it'll all sort itself out.
Last year I taxed my EV until March to save £195. Like you not against road tax except the luxury car tax premium. It will affect you a lot selling cars 1,2,3 years old. Customers having to pay £605 until the car is 6 years old.
Regardless of emissions apply VED from 13:16 £195 to all pre 04/25 registered vehicles ( catch those cars whose emissions were faked) no more £20 tax bracket
I do not mind paying the basic rate VED . However I find it strange how after first years tax it is the same price whether ICE or EV. Should ICE pay more 1 st year and basic rate plus extra depending on emissions? That way they encourage EV based on VED.
This is going to push the future Tesla strategy and Elon’s predictions even quicker, i.e. the death of personal car ownership completely in favour use of extremely low cost autonomous taxis. Why own your own car - capital outlay, depreciation, minimal daily usage, insurance, servicing, fuel, parking, road tax, road tolls, tyres, accident damage, kerb rash, car theft, cost of car theft prevention, risk of accidents, risk of death, causing death to others, I could go on! Or just hail one of thousands of robotaxis that arrive in minutes and take you to your destination in safety and comfort for less than the price of the fuel in your own car! Other than taxi fleet ownership car ownership is doomed!
Think secondhand rfl on pre ‘17 EV’s isn’t going up by as much but so few cars covered by it no one bothered writing the article. Sure someone will correct me.
The emissions charges should apply for 5 years as well really, to retain the appeal of EV over ICE. Want that diesel Range Rover, pay £6k a year tax for 5 years for it etc.
We BEV drivers use the roads, we should contribute, £195 is fair. Of course we prefer free, who wouldn’t, but as more and more people buy EVs, it’s not sustainable
@ petrol is way too cheap, bring back the ICE fuel escalator instead. Labour wouldn’t do it this last budget because of the whole ‘anti motorist’ thing Tories had said they were. 2p/litre of fuel and an annual ved differentiator between ice and EV of at least £100 (£195 v £295). And don’t penalise £3k+ Leaf buyers whose first step into EV was part influenced by zero VED who now have to pay £195 a year.
And everyone will just accept it and pay, forgetting if the masses get together governments are screwed, if we all stopped working they are screwed, if we stopped driving they are screwed. They need us more than we need them, but still everybody will comply.
Nah. If we all stopped paying taxes and the government in itself becomes useless then the political toffs walk away rich. But all our infrastructure would fail. Schools would close. Hospitals would stop running. Police would be disbanded. There would be no fire service. What really needs to happen is the apathy rife in the country needs to stop, and we need to vote in people, party being irrelevant, that will work for us.
@ Vote?!? Voting never changed a thing. I’m in finance and no mater what party has been on the UK economy has been dropping. Fooled people to vote for brexit but the UK doesn’t produce anything. And what I was talking about is called striking, not permanently stop working, just to show this crap government that we don’t just bend over and take it dry.
I’m more concerned how they will deal with the loss of fuel duty. 10k miles in a 40mpg car generates £800+ in fuel duty and vat, the same mileage in a 4m/kWh EV generates around £8 in vat if charged at home.
I find it interesting , that it could cost more to tax a vehicle. that apparently saves the planet. than it does to tax my vehicle that was, and possibly still is. in the top 10 most polluting cars on the planet. I currently pay less to tax and insure 2 petrol and 1 diesel vehicle. than it costs most EV owners to just insure 1 EV. . . just does not make sense.
Yes I don't understand that at all and how is this encouraging people to move to EVs or trying to get Zero emissions.....the whole thing doesn't make much sense other than to get more money of people. They don't care about saving the planet and I suppose why should they when Trump is saying "Drill Baby Drill"....we are determined to destroy the planet
I'm sure the goal posts will get moved again, and probably not in our favour, but I'm glad my March '22 Model Y will be £0 this year and "only" £195 from then on. No problem paying road fund license in general.
@@gnew1-g7n pretty sure not. The luxury tax element isn't retrospectively applied to EVs, it's only applied to 1 April 25 purchases onwards. Vehicles purchased beyond that date will be liable for 5 years, but a vehicle purchased a day before will only be liable for 195 p/a
They have no money and have to get it somewhere, I think the bitter pill is the cost of cars is so high that what you get for £40k isn't super lux premium but a good level of safety and comfort and space... and especially for EV's sub £40k there isnt the choice. One possible upside is maybe it will make car companies tuck there prices under so not 43 or 46K ..maybe??
I’m relieved to hear that buying my M3 LR, 2020 that going forward (as it is now) will be £195/yearly as was mentally prepared to cough up 1 instalment of the £605 rate since it’s over £40k lost price, although will be planning to pretax the car in March. Can I just retax in March or need to go through route of SOAR and then tax as normal? (Would soar invalidate insurance?)
Until 31st of March 2025 road tax is £0 so If you register it before 31st of March you get first year free tax then from the second year it will be £195 per year. Only new EV’s registered from 1st of April will pay premium tax if they are over £40k
@ no he doesn’t. He is saying he wants to buy it before April. The luxury tax is only for new new EV’s over £40k registered from 1st of April 2025. It is written black on white on gov.uk
copy and paste from gov.uk “Additional rate (expensive car supplement) New electric and zero emission vehicles registered on or after 1 April 2025 with the list price exceeding £40,000 will attract the standard rate, plus the expensive car supplement for the first 5 years from the start of the second licence.”
2014 eNV200 panel van, and evalia (taxi with windows are different prices I believe and not £20 either I think it will be more like £320 for the van, and a bit less for the Evalia! Can you verify please👍✅
You don’t have to buy a 5 year old one (talking about EV’s). Either a new one before 01/04/2025 or a few months old and you won’t pay premium tax even if it was £40k when new. That applies only to new cars registered from 01/04/2025 onwards
I'm just counting myself fortunate I got my model 3 performance last Dec... had I got it in April it would cost me more to tax in the 2nd Yr onwards that my BMW M4 which chucks out a ton of emissions compared to the Tesla... Govt are run by lunatics as per usual
Worth stressing that this new 'luxury car tax for EV's' applies to cars REGISTERED AFTER April 1st. Which means that, by April, dealers will have cars on their lot 74 plate(which will sell) and very similar 25 plate cars (which won't sell). So, even after April you will be able to buy an EV which costs more than £40K and not pay the luxury tax - as long as it is a 74 plate - registered before April.
It’s been 40 thousand pounds for a few years now. Strange how inflation doesn’t affect car prices but is standard on household bills. Another example of government trying to make us all poorer.
Since 2017.
I bought a new BMW 520d Touring which just came in under the £40k bracket. The same car now (petrol) is £53k
All government price-based mandates (especially minimum wage) should be indexed to inflation. Anything less is rank incompetence, which is to say it's typical.
Vote the bums out, follow the US and elect a disrupter
hope you voted for Brexit! I really do.
£40k long ago ceased to be a ‘luxury’ car. Just a ‘milk the motorist’ scam!
Yep - it’s been cars over £40k since 2017, with no adjustment for inflation 😬 should be about £54k adjusted.
The actual name of the tax is ‘expensive car supplement’
Everyone will be driving mg haha
@@What-if-I-am-wrong: I drive a BMW iX - if I bought this new after April it would cost another £410 per year in tax 🤣
Could be worse though -those large fuel SUV’s hitting over £5k tax in the first year !
@@SDK2006benvy tax
If you really want an EV and can hold off a year every 40k EV depreciates down to 18-20K a year later, even the modest ones.
A common tip; if you have a zero tax car, renew in March with a payment of £0; this will keep your renewal date in March in future; this is usually the month before rises come in. At least it will save you several months of tax
If you are buying a 3 year old used car original price over £40k, if you tax it before 1st April, would you avoid the higher payment?
@ not sure; Richard might know; the HMRC website is usually accurate on these matters, and worth becoming familiar with
@@tobydouglas5826you avoid it anyway. Only new EV cars registered after 1st of April will have the premium tax. You will only pay £195 per year when you re-tax your car after 1st of April
Meanwhile a Citroen Ami will also be charged £195, while an 8 year old diesel car will be taxed at the old rates of £0-£30 depending on emissions.
Message received: Stick with the old car and starve the government of VAT revenue on that new car sale.
I'm happy to be doing my bit driving my old diesel 😁
That £40k limit is totally incompatible with the ZEV mandate.
So is any form of common sense.
@@welcomeghosts_uk also as car prices go up with inflation more and more cars will hit the 40k mark. They are slowly pricing some people off the road.
@@robertmorton8876just new car buyers, people can buy 5yo cars.
Buy an old car and run it till it needs to be scrapped. You can buy several old cars for the price of one new one.
@@malcolmlytton9114 2016 diesel with low mileage and FSH
Such a fair system…my arse
I actually bought a new EV today that was over 40K for the reason you mentioned. It’s day light robbery without a gun!
You've already been robbed because that new EV has already lost half its value. Just check the values on Autotrader for pre registered cars. It's no joke!
Sorry for your loss 😢😂
It's worth stressing that the 40K cutoff is the manufacturer's list price, including any factory fitted options (e.g. paint!). Any negotiated discount to below 40K won't count.
Also is based on the price AFTER vat is added, to add to the sting...
All this extra revenue for the government, and the roads will still be a mass of potholes.
Tell me about it 😢 my poor passenger side front wheel.
Indeed. The Labour "government" is a bin fire!
You plebs are not meant to drive
You want to live in Northern Ireland, the holes are Massive....you never ever see anyone fixing the holes and we have very few fast chargers and our health service is down the tubes
Why build speed humps when you could just let the roads degrade?
I can imagine that a number of manufacturers will start playing with list prices. I was playing with the configurator for a Kia EV3 GT Line, which when you added metallic paint, raised the price to £40,120 - effectively resulting in an overall cost just short of £2,700 for the paint alone!!
It's the same with Tesla, the base Model 3 is £39,990. The moment you pick a single option like paint or wheels it's over the £40k :/
Don’t worry guys in UK, this is still less than what we pay in NL. Till Dec 2024 for Tesla 3 we also didn’t pay a single cent. Now in 2025 will be paying 25€, 2026-2029 75€ and from 2030 100€!
Let me be clear, not per year but per month! That sums up to 1200€ a year!!! You are still good …
Feck that
NL people pay car tax per month?
They need to adjust the premium tax level as family cars, especially family EV's are now falling into that £40k+ band.
Similarly the general tax allowances on wages has been the same for years.
Currently paying 42% tax for earning over 40,000. Think it was also around 2017/2018 it was last changed. It should be raising with inflation too
£40k Premium tax is a joke, most mid range new car will be over £40k. Inflation pushed up the price of everything, yet this scam remained the same.
These road tax changes will kill the motor trade for premium cars 🚗. The used value of cars within the first 5 years will plummet.
ICE will increase in value after 5 years as people will want them unlike ev's.
This will destroy the new car sales market. Especially for the higher end brands. You work your backside off to buy your dream car and then have to pay 1000’s in tax to drive on roads that look like they have been mortar bombed. This government is an utter joke.
It was set up by the last goverment !
Previous government policy from 2022 J Hunt
Just move countries, the UK is absolutely f*cked these days. It’s sad to see, but it is in a death spiral and it seems there is no going back. I can see the young and able deserting it in droves for somewhere better, and who could blame them.
@@markbloxham1313 it never matters who came up with a policy if the current government sticks by it. By doing so they condone it and may as well have implemented it themselves.
The premium levy needs increasing… £40,000- £55000 isn’t premium anymore… prices have gone up… this needs adjusting.. totally unfair… like you say, I’m not opposed to paying Road tax for an EV… but not the luxury tax, on a Model 3 which isn’t a luxury car… Ferrari is luxury!! I’m still buying the Long Range Model 3 RWD… this year… just gonna have to stomach the hike in tax.. (wife’s car is up for renewal before mine)…
It's the car prices that have gone crazy and need to be reduced way down. A Golf shouldn't cost 40k+. A GTi should be around 30k. Regular Golfs should be 20k+
@ You’re right Chris… it’s a total joke…a Tesla Model 3 in America costs £19000 - in the UK it’s £40000… we’re totally screwed in the UK…
In the nicest possible way pal, you’re as much a part of the problem as the policy itself. Don’t know your situation so not judging, but just buying it anyway and taking the hike on the chin is exactly why the government gets away with lunatic policies like this. If the manufacturers weren’t selling the stockpile of +£40K cars, they would, collectively, have sway over the government and could force a change in policy (like upping the luxury penalty)
@@davsan5329 agreed. It's the people buying these overpriced cars that's the problem. That and the way everyone pays for them on finance. Absolute madness!
Good measures. Thanks for explaining. It'll be intersting to see which EVs around £40k suddenly get price cuts
I’m thinking of buying a 40 year old classic car which will avoid road tax and ULEZ😂. These new rules will slow ALL new car sales over £40k….what a disaster!
The premium tax is already on for combustion cars but from 1st of April it will apply to EV’s as well. If anything it will affect sales of premium new EV’s.
This luxury tax should never been have been introduced in the first place. At the worst it should have been raised each year same as the road tax. As usual we are being ripped off.
Should be called the envy tax! If you have bought a car over £40,000 say £60,000 you will probably have paid more tax than the £40,000 car so in fairness the cheaper car should be taxed more as it hasn’t contributed as much to the tax system as the more expensive one.
Absolute batshit crazy. If its no longer to be based on CO2 emissions, then we should all pay the same, or banded for vehicle weight. As an owner of 3 ICE vehicles, one of which is a transporter, id accept that the transporter would cost more than the Fiat 500 due to damaging the road surface more.
EVs charged off the grid still produce CO2 and other toxins. They've just been relocated to the power stations.
Not to give them ideas, but one could argue that all electrical power consumption also produces the same toxins.
Generally the exhaust stack of the power station isn't right at street level in a town tho...
Lack of clear guidance suggests things may change rapidly as the newspapers start frothing come March.
To make it clear to everyone, a lot of these changes are not new, but were introduced by Jeremy Hunt in 2022 inc. EVs and VED and the luxury car value at £40k.
At the time it was expected half of new cars on the road would be electric. So he changed the rules to come into affect this year.
The main thing I disagree with is retrospectively increasing ved to cars registered 2017 to now. That’s terrible.
Cue lots of car makers selling for £39999 and then offering post-delivery "add ons". 😉
Don’t suppose with all this extra cash that potholes will be repaired ! 🤣🤣
Why build speed humps when you could just let the roads degrade?
lol, and the honeymoon is over.... (for those that don't remember leaded vs unleaded, back then the government gave you a bargain until there was enough using unleaded for them to whack the tax up)
which is what will happen if ev sales increased which won't happen anyway as they are just throw away cars.
Hi Richard, greetings from Oxford. As a BEV owner, I think it is only fair to pay VED, however the algorithm should be encouraging people towards zero emission vehicles. I have a 2019 BMW i3, my partner has a 2015 Audi A3 1.4 petrol. Under the new VED system, I will pay £195 PA for the i3, my partner continues to pay £30 PA for the Audi A3 1.4 petrol. There is no incentive here to switch the A3 for a zero emission vehicle, so we will be keeping it. Not sure this has been thought out!
You have seen Rachel from Accounts haven't you? Of course it's not been thought through. A pile of rocks could do a better job.
So you won’t change the car because of the 195 tax? Which you will save by charging at home?
@@kalex381 not if said car costs £40k+ and then burns your house down 🤦♂️
@@Chris-hy6jy 🤡🤡🤡🤡🤡🤡🤡
@@Chris-hy6jyExactly how many EV'S have caught fire and burnt down somebody's house? Hopefully you can provide evidence of your claims, rather than what you heard down the pub, or saw on Facebook or Tik Tok.
There must be a lot of pressure to increase the threshold for luxury status. However, the is some mileage in not doing anything until after April 1st because leaving it could increase the number of sales before the cut-off date.
Plans to upgrade to new Model Y are officially out of the window.
My 2015 Model S is just getting better and better...and that's not even through a software update! 🙂
My MG4 is due for tax March 1st , so I guess I get lucky this year .
Prior to buying this I had run x3 BMW's on the trot @£30 pa
I wanted to buy another but an 8 month old 120D with the 190bhp
engine was going to be £560 to tax
so I refused to buy it .
On top of that was the traumatic
£1.90 a litre diesel during the last shortage , so now I'm electric!
The £40k luxury tax is a joke and an obscene mugging by whichever
Govt is in power .
With the manufacturers rip off apres Covid, most run of the mill cars exceed the 40k .
Motorists, we are low hanging fruit !!
They need to raise the threshold. - - its way out of kilter with ev pricing levels (£100,000 for a luxury EV)
it's a bunch of clowns running this country, i expect a rush on pre 2017 small cars with free or £20 road tax.... i.e skoda fabia 1.2 dsg =£20 rfl per year....unless they changing I.C.E pre 17 plates too?
Brought in by the previous government though.
Nope, a diesel 5 series from early 2017 will still be £30 a year. As said above though this crazy policy was cooked up in 2022 by the last lot, though the current lot have chosen to let it continue
Over here in New Zealand EVs started paying a per km tax called Road User Charge (RUC). To give you a bit of background, diesel doesn't have duty at the pump and depending on the type and use of a diesel vehicle they pay different RUC. EVs also don't pay duty at the pump because we charge overnight at home or use public chargers which don't incur duty. To make this "fair" the NZ government introduced RUC for EVs last April at the some cost as a diesel vehicle $76/1000km (£35/621 miles). The Net effect of this is that our running costs when charging overnight at home have increased by 2.5 times. Hybrids pay duty per litre of petrol at the pump, and a hybrid able to do 4L/100km could be paying less than half ($30/1000km | £14/621 miles) of an EV. This means that charging overnight on a cheap EV tariff, it's as cheap to run a Hybrid as an EV. With public charging costing 5x more than home charging a Hybrid is much cheaper when doing road trips. The government has said that it plans to move all vehicles across to RUC and remove duty at the pump eventually, but there has been no date set. I have read that there is the potential for the UK to bring in something similar.
Really don't get this to be honest I have a 5 series diesel which is 30 pounds to tax it's madness that an electric car that's has no emissions at all will cost 600 pounds how does it make any sense
EVs are remote emissions vehicles. Most of those emissions take place in China where they are built, where the power is generated, or where the rare earths are mined.
zero tail pipe emissions not zero emissions.remember ev's create more pollution being built than running ICE cars,FACT!!!!
Another great video Richard, always informative 👍
lol 😂
@@jamieallen5970what’s funny about what he said?
A really good honest and useful video....as usual...thanks
It's gonna kill the whole new market, not just electric. You've now got + £600 a year for most electrics, and +much more for non electrics.
In Denmark you pay tax every year for your car, but it is based on CO2 emission or equivalent, for most EVs it is the lowest tax rate of about 80£ per year, but for a common SUVs it could be as much as but not linited to 600£
UK system was identical till not so long ago, but then politicians started smelling money. I do believe it is fair EV's start paying at least something, but they're making the rules far too complex and restrictive...
That's how the UK is currently. Based on co2/km.
As an ICE owner of 3 vehicles, this hasn't bothered me. I do believe that there should be a minimum though, as EVs are still contributing to the state of the roads.
If its no longer to be based on co2 emissions, then all ICE and EVs should pay the same rate, or based on a vehicles weight.
My 2014 Insignia- still £20 / year
Hi you explained that well and yes I’m looking at changing my car before this comes in.
These brackets are not based on what you pay, but vehicle list price…
It’s important to note, when buying a brand new car, the dealer/manufacture will pay the first years road tax.
Which means all new cars over £40k will be at the same tax rate
Won’t dealers / manufacture just raise the list price then and pass that cost on ?
@BenKata23 yes it’s very likely, as it’s included in the OTR price. But I should imagine it will be included with discounts on new cars as the market is now back to normal.
It’s also important to note that 2024 1st road tax could be up to £2745. So it is increasing a lot (basically 100%), but not as much as it seems (comparing to the £10 first time tax).
Excellent explanation, you may have mentioned that if you buy the M3 at £39995, it will be the cheapest but if you change colour of seats or paint will take it over the list price which it is based on, also you mentioned dear ICE cars, could have mentioned the small petrol (panda, twinge etc) which will be charged the a same.👍
bet we'll see lots of cars at £39.9K with purchasable after-sales options....
Yes. Manufactures setting prices based on government rules. Same as DJI did with sub 250g drones to bypass CAA rules.
Well explained, crystal.
I guess the simple answer is to buy a car that is over 1 year old in all examples, having said that new car prices will have to adjust to compensate for the increased tax or contributions made by dealerships or manufactures otherwise the new car market will stall/collapse.
Labour put the nails into the coffin for Land Rover for sure. 10s of thousands out of work including suppliers etc, all down to net zero nonsense.
Nah, JLR screwed themselves and their customers with sh*t ingenium engines and cars as reliable as a Trump promise.
Actually, the new VED bands were introduced by the previous government, not Labour. Also, Land Rover has not been British owned for a long time, it also has terrible quality issues that it has totally failed to resolve. Like Jaguar, these are lovely cars, let down by poor management and a lack of commitment from the staff who design and build them to make consistent quality vehicles. Such a shame.
Jlr just had their best year of sales ever...
Should have kept your Twizy Richard. Quadracycles like the Twizy, Mobilize Duo and Ami will remain tax free.
Err, but my partner's 2013 Ecoboost 1.0 Fiesta will stay on £0 tax, as it has been every year to date?
And so will my dirty diesel. 🤣
Government target is No private ownership of Cars, MP's and their Family plus Buddies of MP's exempt of course
Typically used car prices in the UK are much lower than for example in the rest to the EU due to the Left hand drive, what the new tax system will do is reduce demand dor new cars and over time this will reduce supply of used cars increasing valued of used cars. This will reduce risk of car dealers and likely to keep car loans more competitive as there will be less depreciation.
I think this is a big kick in the nuts for the new EV market. 40k is not a luxury vehicle nowadays! I'm currently driving an EV but will be coming out of it soon. I've loved having it but the lack of incentives to run an EV mean I'll just go back to running an older ICE car now
The honeymoon period for EVs is at an end. They know most EVs that are worth having are over 40G What worries me is how they will fill the black hole of fuel TAX. Mark my words, there will be a plan in place.
59 days to go before tax day then and remember it is calculated on list price not paid price so make your mind up people
The thing is, these tax rates will change every year, so the reality is that these figures are misleading! That isn't your fault, of course. It is the government.
It's just as bad as these companies that change the terms and conditions of the services you've purchased after the contract has been made.
Just to clarify.
If you buy say a new Model Y after ist April 2025, how much tax would you have to pay?
New model y first year £10, subsequent 190. + Luxury car tax 410 = 600 per year for 5 years
@@chrishourigan3276
Thank you!
Will all the optional features be disabled in software, to bring the price below £40k, then you can add them afterwards, avoiding years of extra tax? BMW heated seats come to mind!
At a minimum that 40k premium car value needs to be adjusted for 20 years of inflation.
I think road tax should be flat rate for all vehicles regardless of emissions, use, or even 2 wheels Vs 4.
Make it 195 for all cars on the road and it'll all sort itself out.
Last year I taxed my EV until March to save £195. Like you not against road tax except the luxury car tax premium. It will affect you a lot selling cars 1,2,3 years old. Customers having to pay £605 until the car is 6 years old.
Got my Model 3 scheduled for March 27th and I'm very worried it is delayed. Just need it in the country and registered.
Regardless of emissions apply VED from 13:16 £195 to all pre 04/25 registered vehicles ( catch those cars whose emissions were faked) no more £20 tax bracket
I do not mind paying the basic rate VED . However I find it strange how after first years tax it is the same price whether ICE or EV.
Should ICE pay more 1 st year and basic rate plus extra depending on emissions? That way they encourage EV based on VED.
EVERY car should be taxed at the new minimum of £190 to be fair. Including classic cars!
Okay, where can I get that EV Jet T-shirt? My named shortened is jet, so I just gotta have one!
This is going to push the future Tesla strategy and Elon’s predictions even quicker, i.e. the death of personal car ownership completely in favour use of extremely low cost autonomous taxis. Why own your own car - capital outlay, depreciation, minimal daily usage, insurance, servicing, fuel, parking, road tax, road tolls, tyres, accident damage, kerb rash, car theft, cost of car theft prevention, risk of accidents, risk of death, causing death to others, I could go on! Or just hail one of thousands of robotaxis that arrive in minutes and take you to your destination in safety and comfort for less than the price of the fuel in your own car! Other than taxi fleet ownership car ownership is doomed!
Think secondhand rfl on pre ‘17 EV’s isn’t going up by as much but so few cars covered by it no one bothered writing the article. Sure someone will correct me.
This country is finished
The emissions charges should apply for 5 years as well really, to retain the appeal of EV over ICE. Want that diesel Range Rover, pay £6k a year tax for 5 years for it etc.
We BEV drivers use the roads, we should contribute, £195 is fair. Of course we prefer free, who wouldn’t, but as more and more people buy EVs, it’s not sustainable
It’s excise duty though not road tax
@@ianjames3078 that's true, but VED contributes to general taxation which does pay for road maintenance
@ petrol is way too cheap, bring back the ICE fuel escalator instead. Labour wouldn’t do it this last budget because of the whole ‘anti motorist’ thing Tories had said they were. 2p/litre of fuel and an annual ved differentiator between ice and EV of at least £100 (£195 v £295). And don’t penalise £3k+ Leaf buyers whose first step into EV was part influenced by zero VED who now have to pay £195 a year.
@ianjames3078 the £3K Leaf buyers will be fine, their VED will be £20 👍
Yes, petrol and diesel is too cheap
And everyone will just accept it and pay, forgetting if the masses get together governments are screwed, if we all stopped working they are screwed, if we stopped driving they are screwed. They need us more than we need them, but still everybody will comply.
Nah. If we all stopped paying taxes and the government in itself becomes useless then the political toffs walk away rich.
But all our infrastructure would fail. Schools would close. Hospitals would stop running. Police would be disbanded. There would be no fire service.
What really needs to happen is the apathy rife in the country needs to stop, and we need to vote in people, party being irrelevant, that will work for us.
@ Vote?!? Voting never changed a thing. I’m in finance and no mater what party has been on the UK economy has been dropping. Fooled people to vote for brexit but the UK doesn’t produce anything. And what I was talking about is called striking, not permanently stop working, just to show this crap government that we don’t just bend over and take it dry.
I’m more concerned how they will deal with the loss of fuel duty. 10k miles in a 40mpg car generates £800+ in fuel duty and vat, the same mileage in a 4m/kWh EV generates around £8 in vat if charged at home.
Diesel is taxed at 45% electric when charging at home is 5% tax. This amount lost to the government will grow.
This money is being recouped.
If the new car market is not already suppressed , then it soon will be.
My little env200 van will be £335 FFS I might sell it and go back to diesel 😅
It's not road tax. Everyone, including those that don't have vehicles pay towards the road. This is vehicle tax
Wonder if we’ll see a plethora of new cars for sale at 39999
JUST ADD 3,000 the cost of owning a tesla model Y
I find it interesting , that it could cost more to tax a vehicle. that apparently saves the planet. than it does to tax my vehicle that was, and possibly still is. in the top 10 most polluting cars on the planet. I currently pay less to tax and insure 2 petrol and 1 diesel vehicle. than it costs most EV owners to just insure 1 EV. . . just does not make sense.
Yes I don't understand that at all and how is this encouraging people to move to EVs or trying to get Zero emissions.....the whole thing doesn't make much sense other than to get more money of people. They don't care about saving the planet and I suppose why should they when Trump is saying "Drill Baby Drill"....we are determined to destroy the planet
I'm sure the goal posts will get moved again, and probably not in our favour, but I'm glad my March '22 Model Y will be £0 this year and "only" £195 from then on. No problem paying road fund license in general.
Check your maths. 2022 Y will pay the luxury tax until 2028
@@gnew1-g7n pretty sure not. The luxury tax element isn't retrospectively applied to EVs, it's only applied to 1 April 25 purchases onwards. Vehicles purchased beyond that date will be liable for 5 years, but a vehicle purchased a day before will only be liable for 195 p/a
@@Sweety1915-nono I hope so, in fact I'm depending on it. I plan on keeping that one for a while.
Why is tax not at least partly based on how many miles you do?
Probably because politicans do a lot of miles
Question for Richard how much will electric go up by to charge the 40 grand car through the roof probably
They have no money and have to get it somewhere, I think the bitter pill is the cost of cars is so high that what you get for £40k isn't super lux premium but a good level of safety and comfort and space... and especially for EV's sub £40k there isnt the choice. One possible upside is maybe it will make car companies tuck there prices under so not 43 or 46K ..maybe??
Labour should increase that £40k as it was introduced by Jeremy Hunt in 2022. Prices have gone up a lot since then.
This will kill new car sales of certain types and we will still have crap roads.
I’m relieved to hear that buying my M3 LR, 2020 that going forward (as it is now) will be £195/yearly as was mentally prepared to cough up 1 instalment of the £605 rate since it’s over £40k lost price, although will be planning to pretax the car in March.
Can I just retax in March or need to go through route of SOAR and then tax as normal? (Would soar invalidate insurance?)
The premium cars tax should be index linked with inflation.
If you buy telsa Model 3 2020 how much tax will it cost
£195. No premium tax
In the first 3 years of any new car the depreciation is what will drain your wallet.
NOT your road tax.
So you don't think that £650 a year for 5 years wont help to drain your wallet? ....goodness you must have a big wallet to afford that
@@davidjohn05 Buy a new car for 30K. In 3 years it is worth 15K.
Compare to 3K in Road Tax.
Road Tax really isn't the problem.
Just to clarify if I buy a EV mini car now before April which is over 40k what will I pay ? I have it on lease over 4 years
Until 31st of March 2025 road tax is £0 so If you register it before 31st of March you get first year free tax then from the second year it will be £195 per year. Only new EV’s registered from 1st of April will pay premium tax if they are over £40k
@@powersurge6878 surely if this Mini is Over £40k then the next year he will have to pay the Luxury tax plus the £195...or am I wrong?
@ no he doesn’t. He is saying he wants to buy it before April. The luxury tax is only for new new EV’s over £40k registered from 1st of April 2025. It is written black on white on gov.uk
copy and paste from gov.uk “Additional rate (expensive car supplement)
New electric and zero emission vehicles registered on or after 1 April 2025 with the list price exceeding £40,000 will attract the standard rate, plus the expensive car supplement for the first 5 years from the start of the second licence.”
www.gov.uk/guidance/vehicle-tax-for-electric-and-low-emissions-vehicles#:~:text=Electric%2C%20zero%20or%20low%20emission%20cars%20registered%20on%20or%20after,This%20will%20be%20%C2%A3195.
It's correct name is vehicle excise duty. It stopped being road tax when they stopped spending the square root of fuck all on the roads.
😂
i was looking to buy an ev for my first company car are they still worth it?
Just buy a seond hand EV after 1 year and get it half price
Cheers bro
The roads are not fit for purpose,government/councils shouldbe sued it's unlawful that theycan charge motorists whatever they like.
I looks like I will pay £195.00 as its BMW i4 year 2024 but it cost second over £40K
2014 eNV200 panel van, and evalia (taxi with windows are different prices I believe and not £20 either I think it will be more like £320 for the van, and a bit less for the Evalia!
Can you verify please👍✅
Wow, I'm surprised that the EU would allow the UK to do that.
Oh, wait.
So buy now or buy a 5 year old one or under £40k. I don't begrudge paying road tax as we use the roads like everyone else so its fair enough.
You don’t have to buy a 5 year old one (talking about EV’s). Either a new one before 01/04/2025 or a few months old and you won’t pay premium tax even if it was £40k when new. That applies only to new cars registered from 01/04/2025 onwards
I'm just counting myself fortunate I got my model 3 performance last Dec... had I got it in April it would cost me more to tax in the 2nd Yr onwards that my BMW M4 which chucks out a ton of emissions compared to the Tesla... Govt are run by lunatics as per usual
Worth stressing that this new 'luxury car tax for EV's' applies to cars REGISTERED AFTER April 1st. Which means that, by April, dealers will have cars on their lot 74 plate(which will sell) and very similar 25 plate cars (which won't sell). So, even after April you will be able to buy an EV which costs more than £40K and not pay the luxury tax - as long as it is a 74 plate - registered before April.
He suggested that was not the case. It's applied from when it is first taxed, not registered.