From 1 April 2026 the Expensive Car Supplement threshold for zero-emission cars rose from £40,000 to £50,000. For everything else, including petrol, diesel, hybrid and plug-in hybrid, it stayed at £40,000. If you are choosing an electric company car or a personal lease on an EV, this is the change most likely to affect what the vehicle costs to tax. Here is what moved, and what Intelligent Vehicle Finance customers should check before ordering.
What the Expensive Car Supplement is
The Expensive Car Supplement (ECS) is an additional amount of Vehicle Excise Duty charged on cars with a list price above a set threshold at first registration. For 2026/27 the supplement is £440 a year, payable on top of the £200 standard rate, so £640 a year in total. It runs for five years from the start of the second licence, and for no longer than six years from first registration.
What changed in April
| Vehicle type | List price threshold | Supplement 2026/27 |
|---|---|---|
| Zero-emission cars | Over £50,000 | £440 a year |
| Petrol, diesel, hybrid and plug-in hybrid | Over £40,000 | £440 a year |
The registration-date wrinkle
There is a detail here that most coverage gets wrong, and it is worth getting right.
Electric cars first registered before 1 April 2025 were never liable for the supplement at all. EVs registered on or after 1 April 2025 did become liable, at the £40,000 threshold in force at the time. The new £50,000 threshold applies to those same vehicles, but it only takes effect for licences taken out on or after 1 April 2026.
In plain terms: an EV with a list price between £40,000 and £50,000, first registered in May 2025, will have paid the supplement across its 2025/26 licence year and stops paying once its licence renews on or after 1 April 2026. The change is not retrospective in money terms, only in which vehicles it covers. Check the vehicle's actual registration date rather than assuming.
Why this reaches you on a lease
On a contract hire agreement the funder taxes the vehicle and recovers that cost through the rental. You never receive a VED bill, but the tax sits inside the calculation. A threshold change of this size therefore feeds into how funders treat zero-emission vehicles in the £40,000 to £50,000 band, and it shifts the relative position of an EV against a comparable plug-in hybrid, which is still assessed at £40,000.
For the models Intelligent Vehicle Finance places most often, the band matters. Plenty of specifications sit either side of £50,000 depending on options, and it is the list price at first registration that counts, not the price after any discount. Adding options that push a car over the threshold is a decision with a five-year tax consequence attached to it.
What to check before you order
- Use the list price, not the transaction price. The threshold is tested against the manufacturer's list price at first registration, including factory-fitted options.
- Check the registration date, not the order date. The pre-April-2025 exemption for EVs turns on when the vehicle was first registered, which on a factory order can be months after you commit.
- Do not assume a plug-in hybrid is treated the same. The £50,000 threshold is zero-emission only. A £45,000 PHEV is liable. A £45,000 EV registered after April 2025 is not, from April 2026.
- Watch the options list. On several models a single option pack is the difference between sitting under the threshold and over it.
If you want to know where a specific vehicle and specification sits, call the team on 01752 429950 or request a callback. You can also browse electric car leasing, business car leasing and prestige car leasing, or read our guide to company car tax and BIK rates.
Figures taken from the DVLA V149 rate table for April 2026 and HMRC guidance. Tax treatment depends on individual circumstances and may change. This is general information, not tax advice.
Intelligent Vehicle Finance is a credit broker, not a lender, and receives a commission from the lender or funder when an agreement completes. A trading style of XLCR Vehicle Management Ltd, authorised and regulated by the Financial Conduct Authority (FRN 315268). Subject to status and availability.
Reviewed by Stacey Smith, Brand Director, Intelligent Vehicle Finance. Last updated: September 2026.