New rules around car tax for certain models have been confirmed
State pensioners face £400 bill from HMRC ‘if Rachel Reeves gets her way’
Owners of some cars will save hundreds of pounds this year following changes to tax rules.
Some more expensive cars are subject to a so-called £425 ‘luxury’ tax, on top of the standard rate.
But there has been a change to electric vehicles (EVs) this applies to, from £40,000 sale price when new to £50,000.
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That means EVs sold when new for between £40,000 and £50,000 will now longer be subject to the extra £425 tax.
New tax rates have been confirmed by Rachel Reeves and the Treasury.
This delivers significant savings for owners of these cars.
Popular models now exempt from the charge include: Tesla Model 3, Model Y/Y Premium; Audi Q4 e-tron; BMW iX1/iX2; Polestar 2; and Hyundai Ioniq 5/6.
Motoring experts warn while some models within a range are now exempt, others remain above the tax threshold, making it important to check individual models rather than entire ranges.
Alex Lee, motoring expert at Dick Lovett, explained: “For anyone looking at a new EV, this tax change offers a welcome savings opportunity.
“For those looking at electric cars between £40,000 and £50,000, drivers can now expect to save £2,125 over five years.
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“This also means that drivers will have more choice when it comes to mid-range EVs, and can add higher spec trims to these models without worrying about extra taxes being applied.
“For example, the MINI Countryman SE ALL4 models would already have been exempt from this luxury car tax, but buyers can now benefit by adding high spec configurations such as their Level 1 Pack (from £42,705) without triggering the additional tax on their car.
“However, with the changes in this tax, it’s important for drivers to look into the specific car they are wanting to get to avoid any confusion, as not all models will now be exempt.
“The tax is based on the list price of your vehicle at purchase, so be sure you’re not opting for trims that push you over the threshold without knowing.
“It’s always best to head into a dealership to chat through your options if you’re not sure on pricing.”
