The Expensive Car Supplement: Extra Road Tax on Cars Over £40,000 in 2026/27
How the Vehicle Excise Duty expensive car supplement works in 2026/27, which cars it applies to (including electric vehicles), and how much it adds to the annual bill.
Quick answer
The expensive car supplement is an extra Vehicle Excise Duty charge for cars that had a list price above £40,000 when new, adding £440 a year on top of the standard £200 rate for 2026/27 — a combined £640 a year — for five years starting from the vehicle's second year on the road.
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Road tax (VED) calculatorWhy "list price" catches people out
The £40,000 threshold is measured against the manufacturer's published list price at the point of first registration — including factory-fitted options and VAT — not the price actually negotiated or paid after a dealer discount. This means a car that a buyer picked up for £38,000 after a discount can still trigger the supplement if its list price (before that discount) was £41,000, which is a common source of surprise for buyers who assumed their actual purchase price was what mattered.
Electric cars are no longer exempt
Until April 2025, electric vehicles were exempt from standard VED rates, including the expensive car supplement, as an incentive to support EV adoption. That exemption ended, and electric cars are now taxed under broadly the same structure as petrol and diesel cars — including being liable for the expensive car supplement if their list price is high enough. Because many electric cars, particularly premium and long-range models, are priced above £40,000, a meaningful number of EV owners have become newly liable for the supplement since the exemption ended, with a higher specific threshold applying to zero-emission vehicles from April 2026 to soften the transition.
How the five-year window works
The supplement doesn't apply in the first year of registration — that year uses a separate first-year rate based on the vehicle's emissions (or a flat low rate for zero-emission cars). The expensive car supplement kicks in from the second year and continues for five years in total, after which the car reverts to the standard annual rate for the remainder of its life, regardless of its original list price.
Working out the real cost before buying
Anyone comparing a new car near the £40,000 mark should factor in that crossing the threshold adds £2,200 in total supplement payments over the five-year period (£440 x 5), on top of the standard rate paid throughout. This is worth weighing against any discount or optional extras being added at the point of sale, since a small increase in list price from added options can tip a car over the threshold and lock in five years of extra tax.
Bottom line
Check the manufacturer's list price — not the negotiated price — against the £40,000 threshold before assuming a car will avoid the expensive car supplement, and remember that electric cars are no longer automatically exempt from this charge.
Sources
- gov.uk: Vehicle tax rate tables
- gov.uk: Check or update your vehicle tax
Frequently asked questions
What is the expensive car supplement?
It's an additional annual charge on top of the standard Vehicle Excise Duty rate, applying to cars with a list price over £40,000 when new, payable for five years starting from the second year of registration.
How much is the expensive car supplement in 2026/27?
The supplement is £440 a year for 2026/27, paid in addition to the standard annual rate of £200, meaning an affected car costs £640 a year in total road tax during the years the supplement applies.
Do electric cars have to pay the expensive car supplement?
Yes — electric vehicles lost their VED exemption from April 2025 and are now subject to the same rules as petrol and diesel cars, including the expensive car supplement if their list price exceeds the relevant threshold, though a higher threshold has applied specifically to zero-emission vehicles from April 2026.
Is the list price the same as what I actually paid for the car?
No — the supplement is based on the manufacturer's published list price (including options and VAT) before any dealer discount, meaning a car bought for under £40,000 after a discount can still attract the supplement if its original list price was above the threshold.
How long does the expensive car supplement last?
It applies for five years, starting from the second year the vehicle is taxed (the first year uses a separate first-year rate based on emissions), after which the car reverts to paying only the standard annual rate.
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