Is the controversial luxury car tax applied to new electric cars costing over £40,000 about to be tweaked or even scrapped?
A letter from Labour transport minister Lilian Greenwood to a local MP, seen by Auto Express, says the government will consider raising the threshold of the expensive car VED surcharge “for zero emissions vehicles only, at a future fiscal event”. The aim would be to “make it easier to buy electric cars”.
What is the luxury car tax? Expensive Car Supplement explained
Greenwood is Labour’s minister for the future of roads, and was responding to enquiries made by Ben Maguire, the MP for Launceston, who was in turn representing concerns raised by his constituent – the general manager of a local car dealership – regarding the negative impacts of the ZEV Mandate.
In her reply, Greenwood also stated that the government response to its recent ZEV Mandate consultation “has provided stability and certainty to British vehicle manufacturers by restoring the 2030 (internal combustion) phase out deadline”.
She then went on to highlight possible changes to the VED expensive cars supplement that has been imposed on EVs costing more than £40,000 since April. The move to introduce the supplement – often referred to as the ‘luxury car tax’ – has been widely condemned as a major disincentive to EV purchases.
