Why should a £40k car pay over 3x as much tax as a £39k car?
They made it value based and not emissions based, yet the only charge of note kicks in just above average new spend, which is sort of working middle class or bigger families. Stupid.
Should the 'luxury car tax' threshold be raised?
- Thread starter HangTime
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They made it value based and not emissions based, yet the only charge of note kicks in just above average new spend, which is sort of working middle class or bigger families. Stupid.
The 'fairest' way to implement an inherently 'unfair' tax like the expensive car tax I think would be to set it as a (small) percentage of purchase/list price rather than a fixed figure, so it scales with the relative luxury level of the vehicle.
You could taper it down for used vehicles too relatively easily.
You could taper it down for used vehicles too relatively easily.
![[TW]Fox](/data/man-of-honor/2009.png){kind=avatar}
Why would it?
The difference is there was no price threshold for those emission based taxes, and if anything over time typical emissions from used vehicles were being reduced not increased, so it was getting easier and easier to pay less in tax (one of the reasons they changed the system no doubt). Whereas this luxury car tax is getting more and more commonplace as manufacturers hike their prices.
Additionally, you are talking about old cars with a high tax rate, the 2017 £40k cars I have less issue having a luxury car tax because £40k got you a lot more car in 2017 than it does today.
Take the Korean stuff like Hyundai Santa Fe and Kia Sorento, even the absolute base spec of these models is over £40k now. Same for Ford Galaxy.
Wind the clock back to 2017 and you were packing Audi Q5, Mercedes C Class Estate etc.
Additionally, you are talking about old cars with a high tax rate, the 2017 £40k cars I have less issue having a luxury car tax because £40k got you a lot more car in 2017 than it does today.
Take the Korean stuff like Hyundai Santa Fe and Kia Sorento, even the absolute base spec of these models is over £40k now. Same for Ford Galaxy.
Wind the clock back to 2017 and you were packing Audi Q5, Mercedes C Class Estate etc.
Associate
Add this to the list of taxes that impact many ordinary working people under the banner of taxing the rich.
Associate
And now the 'luxury' supplement is rising to £410 extra on road tax and still no movement on this £40k threshold. Finding it very difficult to buy a family car to tow a reasonable size caravan for cheap family holidays that does not have this 'luxury' car tax slapped on it!!!
You have to pay it if you buy a used car as well. It has nothing to do with how much you paid for your car or what it's worth now, all that matters is the original list price of the car.
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Is there nothing originally under 40k that can tow a caravan?
Man of Honour
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Didn’t even realise this was a thing until my road tax suddenly dropped last year. Tax my pay, tax my purchases, tax me when I die. *******.
Soldato
This. Fiscal drag has a lot to answer for.
Soldato
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It's only for 5 years from new iirc though.
Associate
The first year the VED is in the cost of the car. The first year you pay the £410 on top of normal road tax is as the car enters its 2nd year. So if you buy a 5½ year old that originally had a list price of a tenner over £40,000. You still have to pay the luxury road tax supplement even though you maybe only pay £15k for the car!
Why should cars costing £40,0001k pay more than 3x the road tax of cars with a retail price of £39,999, regardless of any green credentials. It can even be the same car with just some mudflaps added from new!
Don
TBH I'd rather they just stopped putting LCD Screens on every available surface in a car, along with all the other nonsense, and reduce the price of cars in general 
The proper term is 'expensive car supplement' and I don't think you can argue a £45,000 Yaris is anything other than expensiveYes!
No way a GR Yaris at 45k is a luxury car, its a Japanese hot hatch with a plastic interior!
There is, however the premise of this thread was that new car prices were going up a lot (and have risen a lot more since I posted this in 2022) so fewer and fewer decent cars with good pulling power will come in under £40k. The Korean stuff I mentioned before, even the most basic 3 series (non-estate, poverty spec, weakest engine) is over £40k list now.
You will always be able to buy a car to do a job, but the list of choices is diminishing all the time and/or you have to be super careful about trim levels / options. As bonkers as it sounds some little £60 option could end up costing you thousands in tax.
Looking at carwows top 10 best used cars for towing as a random example, the only two on the list that cost under £40k new now are the Dacia Duster and Skoda Octavia. More and more cars are getting dragged into the 'luxury' bracket.
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Soldato
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Unless you're rich.