VED “luxury” car threshold still at £40k

[Alex Z]

Back in 2017 when vehicle excise duty was last reworked, the £40k threshold before you started to pay the “luxury” car supplement only affected a small number of cars. The large majority of cars weren’t hit by it, but now it’s quite easy to spend that much on an ordinary family car.

Has there been any suggestion that this figure should be adjusted for inflation, or is the intention that it’s going to catch an increasing number of vehicles to offset some of the loss in fuel duty that will be received?

[cobra kid]

Easy to spend 40K. Not for me it isn't!

[tomsugden]

See also the HMRC rate for use of own car expenses. Hasn't changed in years despite the rising cost of fuel.

[J77wck]

They will keep it at £40,000. It's hard to get any sympathy from voters if you can afford a 40k car.

[Debaser]

I'm not surprised they haven't increased the threshold. They must be raking in a fortune.

[andy43]

Fiscal drag. Pretty much every tax is affected by it - its a win win - no tax increase headlines but in times of high inflation a real money spinner for the govt.

[iphonedyou]

Alex Z said:

Back in 2017 when vehicle excise duty was last reworked, the £40k threshold before you started to pay the “luxury” car supplement only affected a small number of cars. The large majority of cars weren’t hit by it, but now it’s quite easy to spend that much on an ordinary family car.

Has there been any suggestion that this figure should be adjusted for inflation, or is the intention that it’s going to catch an increasing number of vehicles to offset some of the loss in fuel duty that will be received?

They'll maybe lift it at the same time they lift income tax thresholds. So never.

[JustGetATesla]

Tories in “ripping us off” shock. Vote them out.

[anonymous-user]

tomsugden said:

See also the HMRC rate for use of own car expenses. Hasn't changed in years despite the rising cost of fuel.

Fuel is roughly the same price now as it was in 2011. There was a jump in '22 around the Russian invasion and general inflationary conditions but it's come back down now. In real terms fuel hasn't really jumped massively.

[andy43]

JustGetATesla said:

Tories in “ripping us off” shock. Vote them out.

Absolutely. Starmer’s stance on zero VED for anything 8 cylinders and upwards should be a real vote winner.

[tomsugden]

Forester1965 said:

Fuel is roughly the same price now as it was in 2011. There was a jump in '22 around the Russian invasion and general inflationary conditions but it's come back down now. In real terms fuel hasn't really jumped massively.

It's not just fuel it's supposed to cover though. VED, insurance, maintenance has all gone up while the rate has remained constant.