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Will the £40,000 premium car tax level ever increase?

It is almost impossible to buy an EV with a near 300 mile range for less than the magic £40k. Do you think there are grounds for raising the limit to £45k? I don’t believe the £40k band has ever changed.

Asked on 25 November 2023 by Kate Stephenson

Answered by David Ross
EVs are currently exempt from the premium car tax. For non EVs there are grounds for raising the £40,000 limit for the premium rate tax given that prices will continue to rise, although given that this generates considerable revenue for the government we would not expect the limit to be raised any time soon. Tax rates will change in 2025 and electric cars will no longer be exempt from the premium car tax, so it’s possible the limit will increase.
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