If your car had a list price above £40,000 when new, you pay an Expensive Car Supplement of £440 a year on top of the £200 standard Vehicle Excise Duty rate, giving an annual bill of £640 for the 2026/27 tax year. The surcharge runs for five years, starting the second time the car is taxed, and adds £2,200 in total to your VED costs. It applies regardless of how low the car’s emissions are, so even a clean petrol or diesel triggers it if the price is high enough.1GOV.UK. V149 – Rates of Vehicle Tax – April 2026
What Counts Toward the £40,000 List Price
The figure that matters is the published price before the car was first registered, not what you actually paid. Discounts, trade-ins, and negotiated reductions are all irrelevant.2GOV.UK. Vehicle Tax Rates – Cars Registered on or After 1 April 2017 The list price includes the manufacturer’s recommended retail price, VAT, delivery charges, and the pre-delivery inspection.3GOV.UK. Changes to Vehicle Tax From April 2017 – Webinar Q and A
Options and accessories fitted by the manufacturer also count. This is the detail that catches people out. A base price of £38,000 can cross the threshold once the factory adds a technology pack or upgraded wheels. Items fitted by the dealer after registration are excluded, along with disability adaptations, the first registration fee, and government grants.3GOV.UK. Changes to Vehicle Tax From April 2017 – Webinar Q and A If you are ordering a new car close to the boundary, choosing dealer-fitted accessories over factory options can keep you under £40,000 and save £2,200 across the surcharge period.
When You Start and Stop Paying
The supplement does not apply during the car’s first year on the road. In that year VED is based solely on CO2 emissions, on a sliding scale that runs from £0 for the cleanest petrol and diesel cars to several thousand pounds for the highest emitters.4GOV.UK. Vehicle Tax for Electric, Zero and Low Emission Vehicles
From year two through year six, you pay the £200 standard rate plus the £440 supplement, for a combined £640 each year. Once the car reaches its seventh year of registration the supplement drops off and the bill reverts to the £200 standard rate for the rest of the car’s life.5GOV.UK. V355/1 Notes About Tax Classes
The supplement has crept up over recent years. It was £425 in 2024/25, rose to £440 from April 2025, and holds at £440 for 2026/27.6House of Commons Library. Vehicle Excise Duty and Zero Emission Vehicles1GOV.UK. V149 – Rates of Vehicle Tax – April 2026 The rate applied to your car is whatever is in force in the tax year you renew, not the rate that applied when the car was first registered.
Electric Cars Have a Higher £50,000 Threshold
Electric cars were fully exempt from VED until 31 March 2025. That exemption ended on 1 April 2025, and all electric vehicles now pay road tax. The first-year rate for a new zero-emission car is £10, and the standard annual rate is £200 thereafter, the same flat rate as petrol and diesel.4GOV.UK. Vehicle Tax for Electric, Zero and Low Emission Vehicles
The Expensive Car Supplement applies to electric vehicles too, but at a higher price point. Petrol and diesel cars trigger the surcharge above a £40,000 list price; electric cars only trigger it above £50,000.1GOV.UK. V149 – Rates of Vehicle Tax – April 2026 An EV listed at £48,000 pays only the £200 standard rate, while a petrol car at the same price pays £640.
Check the Surcharge Before Buying Used
Any remaining years of the supplement transfer with the car when it changes hands. A three-year-old car originally listed above £40,000 still has two more surcharge years ahead, and the new owner pays them. The current market value is irrelevant. What locks the surcharge in is the original list price at first registration.
You can check whether a specific vehicle is affected using the free GOV.UK vehicle enquiry service. Enter the registration number and the result will show a line reading “additional rate applicable until” with a date if the supplement is still in force.7GOV.UK. Get Vehicle Information From DVLA If no such line appears, the supplement has either expired or never applied. Running the check before agreeing a price is worth the thirty seconds it takes: the difference between a car with two years of supplement remaining and one where it has expired is £880 in future tax.
Paying Monthly Adds 5%
You can pay VED annually, six-monthly, or by monthly Direct Debit. The annual single payment is the cheapest. Anything spread over instalments adds a 5% surcharge to the total, so a £640 annual bill becomes £672 when paid monthly.1GOV.UK. V149 – Rates of Vehicle Tax – April 2026 Across the five surcharge years, choosing monthly payments adds around £160 in extra cost over paying annually.
Disability Exemptions Cover the Supplement
A full VED exemption or 50% reduction is available if the registered keeper receives certain disability benefits, and the exemption covers the whole bill including the Expensive Car Supplement. A full exemption applies to recipients of the enhanced rate PIP mobility component, higher rate DLA mobility component, enhanced rate Adult Disability Payment mobility component, War Pensioners’ Mobility Supplement, or Armed Forces Independence Payment. The 50% reduction applies to the standard rate PIP or Adult Disability Payment mobility component. The daily living component of PIP and the lower rate DLA mobility component do not qualify.8GOV.UK. Financial Help if You’re Disabled – Vehicles and Transport The relief covers only one vehicle at a time, and it must be registered in the disabled person’s name.