Expensive car supplement catching mainstream models
A new report has revealed that almost one million drivers will pay the government’s expensive car supplement this year.
The expensive car supplement is an annual £440 surcharge paid for five consecutive years after the second year of registration.
The government has kept the threshold at £40,000 since the supplement was introduced in 2017 despite rising new car prices, meaning a policy that was designed for luxury vehicles is now impacting everyday fleet choices.
Simon Staton, client management director, Venson Automotive Solutions, said: “When the expensive car supplement was introduced in 2017, the average new car cost around £26,000.
“Today’s average new car price exceeds that, which means the expensive car supplement captures many vehicles businesses wouldn’t consider luxury at all. Fleet operators aren’t procuring prestige vehicles, they’re sourcing practical, safe and increasingly well-equipped cars that employees need to do their jobs.”
He added: “Previous Venson research showed motorists were divided over the expensive car supplement, but the issue has evolved beyond whether the tax is fair. As average vehicle prices rise, businesses are increasingly questioning whether the threshold still reflects today’s market.
“Despite the additional cost pressures and administrative burden that the supplement brings to fleet however, the company car remains a key tool in recruiting and retaining talent. It’s a careful balance for companies, avoiding additional tax and providing potential new employees with vehicles that match their expectations.”
