Greater than 475,000 drivers are set to save lots of £425 a yr, in keeping with new analysis
Hyundai Ioniq 5 (Picture: Hyundai/Newspress)
A shake-up in automobile tax rules in April 2026 signifies that drivers of sure higher-end autos now not face a further £425 annual cost. Recent analysis from Dick Lovett has uncovered simply what number of motorists stand to realize from the brand new tax reforms.
Electrical autos had been beforehand exempt from the ‘luxurious car tax’ — formally generally known as the Costly Automobile Complement — nevertheless it was beforehand introduced that EVs priced at £40,000 or extra and registered after April 1, 2025, had been topic to paying the extra £425 per yr. Nevertheless, this restrict was elevated to £50,000 from April 1, 2026, which means drivers with widespread fashions priced between £40,000 and £50,000 will now keep away from this additional cost.
Inspecting UK car registrations since April 1, 2025, motor group Dick Lovett mentioned it had calculated that not less than 475,836 drivers would profit from this tax change, saving £425 a yr. Drivers would have needed to pay this tax for a five-year interval, ranging from the second yr of their automobile’s “life”, which means drivers now exempt will save a complete of £2,125 over 5 years.
Scrutinising the 116 EV fashions throughout 23 ranges that fall inside £40,000 to £50,000, Dick Lovett mentioned it discovered 475,836 registered autos are actually excluded from the brand new luxurious automobile tax. Whereas sure fashions inside a variety are actually exempt, others stay above the tax threshold, making it important to confirm particular person fashions reasonably than complete ranges.
As an example, motorists buying the BYD Sealion 7 Consolation will now keep away from the £425 annual cost, with an on-road worth of £46,990, whereas the remaining Sealion 7 variants will proceed paying the charge. Nonetheless, some full ranges are actually exempt from the tax. BMW’s iX1 and iX2 ranges now sit beneath the posh automobile tax threshold when contemplating commonplace specs.
Fashions exempt from luxurious car tax after April 1 2026 change
- Audi This autumn e-tron (82,925 registered autos in Q2 and Q3 2025)
- BMW iX1and iX2 (46,017 registered autos)
- BYD Seal Design EV and Sealion 7 Consolation EV (7,216 registered autos)
- Cupra Tavascan (5,667 registered autos)
- Ford Capri (2,284 registered autos)
- Hyundai Ioniq 5 and Ioniq 6 (20,161 registered autos)
MG IM6 (Picture: MG IM6/Newspress)
- Lexus RZ (2,209 registered autos)
- Mercedes-Benz CLA Electrical and EQA (2,000 registered autos)
- MG IM6 Lengthy Vary (27 registered autos)
- Peugeot E-3008 and E-5008 (19,609 registered autos)
- Polestar 2 (44,347 registered autos)
- Skoda Enyaq (22,534 registered autos)
- Tesla Mannequin 3 Premium, Mannequin Y and Mannequin Y Premium (211,125 registered autos)
Alex Lee, motoring skilled at Dick Lovett, mentioned: “For anybody a brand new EV, this tax change affords a welcome financial savings alternative. For these electrical automobiles between £40,000 and £50,000, drivers can now anticipate to save lots of £2,125 over 5 years.
“This additionally signifies that drivers could have extra selection relating to mid-range EVs, and may add greater spec trims to those fashions with out worrying about additional taxes being utilized. For instance, the MINI Countryman SE ALL4 fashions would have already got been exempt from this luxurious automobile tax, however patrons can now profit by including excessive spec configurations corresponding to their Stage 1 Pack (from £42,705) with out triggering the extra tax on their automobile.
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“Nevertheless, with the modifications on this tax, it is necessary for drivers to look into the precise automobile they’re eager to get to keep away from any confusion, as not all fashions will now be exempt. Whereas BMW’s iX1 and iX2 ranges now fall beneath the posh automobile tax threshold, the iX M60 fashions is not going to be exempt from the £425 per yr cost.
“The tax is predicated on the listing worth of your car at buy, so make certain you are not choosing trims that push you over the brink with out understanding. It is at all times greatest to move right into a dealership to talk via your choices in case you’re unsure on pricing.”
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