Rachel Reeves confirms new £2,200 charge for | Tech News
Rachel Reeves is set to hit sure motorists with a hefty £2,200 charge in 2026, with new modifications coming into impact this April. New Vehicle Excise Duty (VED) car tax bands launched on April 1, with charges up throughout the board for many petrol, diesel and electric car homeowners.
One main replace issues Expensive Car Supplement (ECS) charges, with payments up by £15 per yr in 2026. The ECS charge is a luxurious car tax, an extra annual payment added on prime of the prevailing VED payment.
Petrol and diesel automobiles registered on or after 1 April 2017 which can be exceeding £40,000 in worth pay the invoice, with the edge set at £50,000 for electric autos. ECS charges had been set at £425 per yr, however this was elevated to £440 every year from April below annual inflationary rises.
With ECS charges paid over a period of 5 years between the second and sixth years of a car’s lifespan, motorists can pay £2,200 over half a decade. This is a £75 increase on the earlier £2,125 five-year charge paid by highway customers final yr.
Unlike many expenses, the ECS tax is tied to the vehicle registration, not the proprietor, that means that payments will switch to new homeowners. It means these shopping for a second-hand car registered within the previous six years might be at risk of being hit with a portion of the charge.
HM Revenue and Customs has revealed the coverage is predicted to value the Treasury £50million in income this yr.
HMRC defined: “Zero-emission cars with a list price which exceeds £40,000, but does not exceed £50,000, will no longer be required to pay the ECS charge when they take out a licence which comes into effect on or after 1 April 2026 which is not a first vehicle licence.
“The threshold will be maintained at its current level of £40,000 for all other cars.”
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