Luxury Car Tax UK Explained
Buying a new car over £40,000? You’ll pay extra each year in luxury car tax.
The Expensive Car Supplement (ECS), also known as luxury car tax, was introduced as part of a Vehicle Excise Duty (VED) shake-up in April 2025.
Key points to note:
- Electric vehicles (EVs) lost their VED exemption in April 2025.
- EVs and non-EVs over £40,000 are subject to the luxury car tax.
- The £40,000 rule has applied to non-EVs since April 2017.
The Expensive Car Supplement (ECS) is the proper name for the luxury car tax.
Author's summary: Luxury car tax applies to new cars over £40,000.
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