Owners of some cars will save hundreds of pounds this year following changes to tax rules. Changes to the so-called luxury car tax mean some drivers will no longer have to pay the charge.
Electric Vehicle Tax Threshold Raised
For electric vehicles (EVs), the luxury car tax now applies to new cars bought for at least £50,000, up from £40,000. That means EVs sold when new for between £40,000 and £50,000 will no longer be subject to the extra £425 tax. This will deliver a welcome tax break for people who buy these cars.
Over five years of owning the car, it would save £2,125. It is some good news for EV owners who now have to pay standard vehicle tax and will also be hit by a new pay-per-mile rate in two years' time.
Popular Models Now Exempt
Popular models now exempt from the charge include: Tesla Model 3, Model Y/Y Premium; Audi Q4 e-tron; BMW iX1/iX2; Polestar 2; and Hyundai Ioniq 5/6.
The tax is an added charge for people buying what are considered to be expensive cars. It is important that people buying new cars fully check if they will be subject to any extra tax payments on top.
Alex Lee, motoring expert at Dick Lovett, explained: "For anyone looking at a new EV, this tax change offers a welcome savings opportunity. For those looking at electric cars between £40,000 and £50,000, drivers can now expect to save £2,125 over five years."
He added: "The tax is based on the list price of your vehicle at purchase, so be sure you are not opting for trims that push you over the threshold without knowing. It is always best to head into a dealership to chat through your options if you are not sure on pricing."
