Thousands of Motorists Face £425 Car Tax Charge on 'Ordinary' Vehicles
Chancellor Rachel Reeves is facing significant backlash over new Vehicle Excise Duty (VED) regulations that will see thousands of drivers paying substantially higher car tax fees within weeks. The controversial changes have been described as "detached from reality" by critics who argue they unfairly target owners of what are considered ordinary vehicles.
Expensive Car Supplement Threshold Increase
Under the revised rules, electric cars registered on or after April 2025 with a list price of £50,000 or more will now be subject to an additional annual road tax charge of £425. This payment applies during years two through six of vehicle ownership. The threshold represents a significant increase from the previous £40,000 limit that had been in place.
Shahzad Sheikh, founder and presenter of the popular YouTube channel @BrownCarGuy, has been particularly vocal in his criticism of the Chancellor's approach. He argues that the original £40,000 threshold had become completely disconnected from current automotive market realities.
"We live in an era where Britain's best-selling car, the Ford Puma, starts at £26,500," Sheikh explained. "Cars are expensive now, and plenty of perfectly ordinary electric vehicles now sell past the £40,000 bracket without being remotely luxurious."
Different Rules for Different Fuel Types
The threshold adjustment creates a notable disparity between vehicle types. While electric cars now face the higher £50,000 threshold for the Expensive Car Supplement charge, petrol and diesel vehicles remain subject to the original £40,000 limit. This differentiation has raised questions about fairness and consistency within the taxation system.
Sheikh emphasized this point, noting: "From April 1, 2026, the threshold for electric cars has been increased to £50,000, and that applies to any car registered after April 1, 2025. However, this change does not apply to petrol and diesel cars. Their threshold remains firmly stuck at £40,000."
Additional Changes Affecting Plug-in Hybrids
The tax reforms extend beyond purely electric vehicles. Plug-in hybrid vehicles (PHEVs) registered after April 2017 will now face standard road tax of £195 per year from the second year of ownership. Additionally, from April 2028, these vehicles will be subject to an eVED mileage charge of 1.5p per mile.
These changes mark a significant departure from previous policies where PHEVs benefited from reduced VED rates. The government's 2025 reforms eliminated these advantages as part of broader adjustments to vehicle taxation.
Historical Context and Policy Shifts
The new regulations represent a dramatic shift from previous government approaches to electric vehicle taxation. Before 2025, electric cars enjoyed completely free road tax as part of government efforts to encourage EV adoption and reduce the UK's carbon emissions.
This tax exemption helped balance the cost difference between electric vehicles and their petrol or diesel counterparts, providing financial incentives for drivers to make the switch to cleaner transportation options. Government officials have stated that the latest road tax changes aim to create a fairer system for all road users while maintaining environmental objectives.
The implementation of these new VED rules comes as part of broader fiscal adjustments under Chancellor Rachel Reeves' leadership, with motorists now preparing for increased transportation costs in the coming weeks.
