The VED Premium Car Supplement on £40,000+ Cars (2026/27)
How the Vehicle Excise Duty premium supplement works for cars priced over £40,000 (and EVs over £50,000) in 2026/27, with the exact annual cost.
The 2026/27 VED Premium Supplement
| Item | 2026/27 value |
|---|---|
| Standard annual rate (year 2 onwards) | £200 |
| Premium supplement (petrol/diesel/hybrid, list price over £40,000) | £440/year |
| Premium supplement duration | 5 years (broadly years 2-6) |
| EV premium supplement threshold | List price over £50,000 |
| EV standard rate | £200 (same as ICE from April 2025) |
| EV first-year rate | £10 |
Worked Example: £45,000 Petrol Car
| Year | Charge | Total |
|---|---|---|
| Year 1 | CO2-banded first-year rate (varies by emissions) | Varies |
| Years 2-6 | £200 standard + £440 supplement | £640/year |
| Year 7 onwards | £200 standard rate only | £200/year |
Over the 5 supplement years, that's an extra £2,200 above the standard rate alone, purely for exceeding the £40,000 list-price threshold.
Why the Threshold Catches More Cars Than Expected
The £40,000 test uses the manufacturer's list price at first registration, including factory-fitted options and extras, before any dealer discount is applied.
EVs and the Premium Supplement
| Vehicle type | Premium supplement threshold (list price) |
|---|---|
| Petrol, diesel, hybrid | £40,000 |
| Zero-emission (EV) | £50,000 |
EVs lost their long-standing VED exemption from April 2025, and the higher £50,000 EV-specific premium threshold for 2026/27 reflects that electric vehicles still average a higher list price than combustion-engine equivalents — check gov.uk for the latest position, as this area has changed more than once recently.
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What is the VED premium supplement in 2026/27?
It's an additional £440 a year Vehicle Excise Duty charge applied to cars with a list price over £40,000 when new, on top of the standard £200 annual rate, payable for 5 years starting from the second year of registration.
How much total VED does a £45,000 petrol car cost per year in years 2-6?
£200 standard rate plus £440 premium supplement = £640 per year, for 5 years from the second year of registration (years 2 through 6), after which it drops to the standard £200-per-year rate alone.
Do electric vehicles pay the premium supplement?
Yes, from April 2025 EVs lost their VED exemption. From April 2026, the premium supplement threshold for zero-emission cars is set at list prices over £50,000 (compared with £40,000 for petrol, diesel and hybrid cars), reflecting the still-higher average price of EVs — but confirm the current threshold on gov.uk, as EV VED rules have changed more than once in recent years.
Is the £40,000 threshold based on the price I actually paid?
No — it's based on the manufacturer's list price (including options and factory-fitted extras) before any dealer discount, which means a heavily discounted car can still attract the supplement if its original list price exceeded the threshold.
How much is standard VED for a car after the first year in 2026/27?
£200 per year for petrol, diesel, hybrid and standard-rate electric vehicles for 2026/27 — the same flat rate regardless of engine size or emissions, once past the CO2-banded first-year rate.
Does the premium supplement apply to the first year of registration?
No, the first-year rate is calculated separately based on CO2 emissions (or a flat EV first-year rate). The £440 premium supplement applies from the second year of registration and continues for 5 years, i.e. broadly years 2 to 6.
Can I avoid the premium supplement by buying the car second-hand?
No — the supplement is tied to the car's original list price and registration date, not the current owner, so a second-hand buyer of a car originally priced over £40,000 still pays the supplement for whatever remains of the 5-year period from the second year of registration.
Where do I check my car's exact VED rate?
Use the gov.uk vehicle tax checker with your registration number, which shows the current VED rate and renewal date based on DVLA records for that specific vehicle.
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