DVLA Monday alert over ‘expensive’ tax mistake

May 18, 2026 3,302

Drivers are being warned not to fall into a costly tax trap, after the Driver and Vehicle Licensing Agency (DVLA) issued a fresh alert on the rules.

The agency said motorists buying an electric vehicle must check the official list price carefully – or risk being hit with hundreds of pounds in extra charges each year. In a social media post on Monday, it said: “Electric cars priced £50,000 or under are no longer subject to the expensive car supplement if they were first registered from April 1 2025.”

But crucially, vehicles above that threshold are not spared.

The charges explained

From April 2025, electric cars are no longer fully exempt from Vehicle Excise Duty (VED), bringing them broadly into line with petrol and diesel models.

The costs break down as follows:

First year: £10
Standard rate (from year two): £200 per year

However, for cars with a list price above £50,000:

Standard rate: £200
Expensive car supplement: £440
Total: £640 a year for five years

That additional charge applies from the second to the sixth year of ownership.

Why this is such an ‘expensive mistake’

A driver choosing an EV just under the £50,000 threshold will typically pay around £200 a year. But go just over the line and the bill jumps to £640 a year for five years

That amounts to an extra £2,200 over the period – purely because of the list price.

Crucially, it is the official list price before discounts that determines the tax band, not what the buyer actually pays.

Falling EV prices reduce the risk

The warning comes as electric car prices are dropping rapidly, making it easier for buyers to stay below the threshold.

Data from the Society of Motor Manufacturers and Traders shows EV sales continuing to rise strongly against the background of the greater availability of lower-cost models

Meanwhile, the used market has seen particularly sharp price falls, with second-hand EVs depreciating faster than many petrol equivalents due to growing supply.