The five hundred,000 drivers ‘exempt’ from Rachel Reeves new £440 per yr automotive tax

Hundreds of drivers might dodge hefty new tax rises launched by Rachel Reeves earlier in April.

UK Chancellor of the Exchequer Rachel Reeves Presents Spring Statement

Rachel Reeves has modified Costly Automobile Complement charges for 2026 (Picture: Getty)

Nearly half one million motorists are set to be “exempt” from new automotive tax costs launched by Rachel Reeves, based on new evaluation. Consultants at Dick Lovett have revealed that no less than 475,836 drivers will dodge Costly Automobile Complement (ECS) charges underneath new rule modifications.

The Chancellor has elevated ECS charges in 2026, with payments rising from £425 to £440 per yr paid over 5 years, a complete leap from £2,125 to £2,200 over half a decade. Nonetheless, the Treasury elevated the ECS threshold forward of the 2026 modifications, with electrical automobiles priced at £50,000 now paying the charge as an alternative of these over £40,000.

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The brand new tweaks imply many EVs valued above the £40k threshold will now not pay ECS costs. Evaluation from Dick Lovett has recommended that Audi, BMW, Ford, Mercedes and Peugeot homeowners are amongst these set to learn from the brand new tweaks.

Alex Lee, motoring knowledgeable at Dick Lovett defined: “For anybody taking a look at a brand new EV, this tax change gives a welcome financial savings alternative. For these taking a look at electrical automobiles between £40,000 and £50,000, drivers can now anticipate to avoid wasting £2,200 over 5 years.

“This additionally implies that drivers could have extra alternative relating to mid-range EVs, and might add increased spec trims to those fashions with out worrying about further taxes being utilized.”

These with the keys to model new BYD, Cupra, Hyundai, Lexus, MG, Polestar, Skoda and Tesla fashions might additionally profit from new exemptions. Nonetheless, consultants warn that ECS payments are depending on the listing worth of autos, which incorporates the worth of any further extras.

Alex added: “The tax is predicated on the listing worth of your car at buy, so make sure you’re not choosing trims that push you over the brink with out understanding. It’s at all times greatest to move right into a dealership to speak by means of your choices in case you’re unsure on pricing.”