The threshold for the ‘luxury car tax’ surcharge is still too low for EVs despite last week’s increase, Alphabet GB has said. As announced in the Autumn Budget,
The threshold for the ‘luxury car tax’ surcharge is still too low for EVs despite last week’s increase, Alphabet GB has said.
As announced in the Autumn Budget, the threshold for the Vehicle Excise Duty Expensive Car Supplement (ECS) will rise from £40,000 to £50,000, with effect from 1 April 2026 and applied to ZEVs registered from 1 April 2025 onwards.
The change applies retrospectively, meaning that most vehicles registered from 1 April 2025 will not be required to pay the charge. Any vehicles taking out a second licence with effect before 1 April 2026 will be required to pay one year of the charge only. However, the £40,000 threshold will remain in place for all other cars.
Alphabet welcomed the news but said the increase does not go far enough.
Earlier this year, the business mobility and fleet management services specialist had called for the threshold to be increased to £60,000 – based on a review of 3,508 quotable vehicle models – and to be reviewed annually.
Caroline Sandall-Mansergh, consultancy and channel development manager at Alphabet GB, said the increase to the ECS threshold did not reflect manufacturers’ huge capital investment to reach the milestones of the zero-emission mandate, “which will continue to impact the P11D (list price) of the vehicles over the next few years”.
She continued: “Our (Alphabet) data reveals that, as of 26 November 2025, the average P11D value of 1,090 quotable EV models is £56,633, meaning that the new ECS threshold will still come up short by 13.27% from April 2026.
“And for 53% of quotable EVs above the £50,000 threshold, the average P11D value equates to £72,437, which illustrates why the threshold needs to shift further to be truly reflective of the market.”
