Labour may U-turn on major car tax rule change | Tech News

Sir Keir Starmer and Labour officers may U-turn on a major rule change simply months after it launched. Labour chiefs have confirmed they’ll “consider” rising the edge for the extra “luxury” car tax price many electric vehicle homeowners are being pressured to pay.

EVs have been beforehand exempt from Vehicle Excise Duty (VED) charges however this modified in April 2025. Under the new guidelines, EV homeowners have been pressured to pay the usual £195 annual charge and can be answerable for Expensive Car Supplement (ECS) fees on new autos. This is an further £425 price which applies to model new fashions with a checklist price of over £40,000 between the econ and sixth years on the street.

Usually this was reserved for top-end petrol and diesel vehicles however the high upfront price of electric autos means most shopping for brand-new can be caught out.

This would add an further £2,125 to the fee of EV car possession over half a decade and may deter many from making the leap.

In the UK, over 1.4 million electric autos (EVs) have been registered by the tip of 2025 suggesting thousands and thousands might be affected by the new rule.

However, a Treasury spokesperson has harassed guidelines might quickly change to “make it easier” for motorists to buy electric vehicles.

The Government harassed any updates would offer “incentives through the tax system” to switching fuel sorts.

A spokesperson advised Fleet News: “As announced at Autumn Budget 2024, the Government will consider raising the expensive car supplement threshold for EVs only at a future fiscal event to make it easier to buy zero-emission cars.

“Our approach ensures fiscal stability while providing incentives through the tax system such as freezing vehicle excise duty first-year rates for EVs to encourage the transition to electric and zero-emission vehicles.”

The replace comes after motoring officers from throughout the board have demanded motion was taken to rethink the costs.

The Association of Fleet Professionals (AFP), the British Vehicle Rental and Leasing Association (BVRLA) and the Society of Motor Manufacturers and Traders (SMMT), have all referred to as for the the edge to be shortly up to date.

Mike Hawes, chairman of the SMMT just lately mentioned: “Obviously inflation means an increasing number of numbers of cars are subject to that sort of fiscal drag and drawn into that, and the overwhelming majority of EVs are subject to an expensive car supplement, which is not the message you’re trying to give consumers.”