Lease Car - Company charging VED/Road Tax

Natcole

Hi

Sorry new to the forums and looking for some advice.
I have received a letter from my lease car company requesting payment for £520 which is due to unforeseen increases to them for VED.
£440 + vat.

They are claiming that the agreement means that they pay £180, then VED has now increased to £195.
On top of that, quote below:

"In addition, you have been charged the luxury vehicle tax as well. Under the subheading "Vehicles with a list price of more than £40,000", it states that "You have to pay an extra £425 a year if you have a car or motorhome with a list price of more than £40,000." The DVLA have valued the vehicle above £40,000, which was more than the value we have on record from the manufacturer. Due to this unexpected increase, we have also been charged the additional £425, and have had to charge the shortfall for reasons explained above."

Surely they knew about this Luxury Vehicle Tax existing when the contract was signed in May 2023 as it was introduced in 2017.
If, however as they are claiming the DVLA have suddenly pushed this car into this tax bracket, is this even something that the DVLA can do?

Thanks 

Keep_pedalling

For cars very close to the LCT £40k value it may not be known if it will be subject to the tax at the time you order only once it has been delivered.

Natcole

Thanks for the reply.
The issue is that we have now had the car 2 years (delivered 2 years ago this time) so surely this issue would have been known about before now I would have thought?

Arunmor

To be clear OP you signed the contract in 2023 and the lease company have only raised the issue in 2025?

Natcole

Arunmor said:

To be clear OP you signed the contract in 2023 and the lease company have only raised the issue in 2025?

Yeah that's right. Contract was signed in 2023, car delivery was May or June 2023.
Now they are suddenly saying that the Luxury Vehicle Tax is applicable and wasn't foreseen in known about, hence they can charge me for it.

The contract says:
If it is reasonable to do so we can vary the Regular Payments by giving you at least 30 days written notice solely to the extent necessary to respond to a variation in the following:

1. Any government grant applied to the purchase of a Vehicle with particular characteristics or to a person who is registered as disabled
2. Any change in Vehicle Excise Duty, VAT or any other applicable tax; or b. Any increase in the cost of the Vehicle to us, whether due to import tariffs, other statutory charges and/or manufacturer price increases. See clause 12.1 of the attached terms and conditions

I do not disagree with the payment of the VED increase of £15 plus the VAY as this is an unknown increase which only took effect this year, but for them to say that the car is now valued above the LCT 2 years down the line seems a bit questionable.

Keep_pedalling

Natcole said:

Arunmor said:

To be clear OP you signed the contract in 2023 and the lease company have only raised the issue in 2025?

Yeah that's right. Contract was signed in 2023, car delivery was May or June 2023.
Now they are suddenly saying that the Luxury Vehicle Tax is applicable and wasn't foreseen in known about, hence they can charge me for it.

The contract says:
If it is reasonable to do so we can vary the Regular Payments by giving you at least 30 days written notice solely to the extent necessary to respond to a variation in the following:

1. Any government grant applied to the purchase of a Vehicle with particular characteristics or to a person who is registered as disabled
2. Any change in Vehicle Excise Duty, VAT or any other applicable tax; or b. Any increase in the cost of the Vehicle to us, whether due to import tariffs, other statutory charges and/or manufacturer price increases. See clause 12.1 of the attached terms and conditions

I do not disagree with the payment of the VED increase of £15 plus the VAY as this is an unknown increase which only took effect this year, but for them to say that the car is now valued above the LCT 2 years down the line seems a bit questionable.

If the LCT applied it should have also been payable in May /June 2024 as well. What was the on the road price?

Hoenir

Presumably you have rung them and asked for more information to clarify. 

Natcole

There was no charge last year for the VED at all, it was paid by them so I assume it wasn't applicable. So I failt to see why it is suddenly applicable now when the LCT has been in place since 2017.
I have called them but they just keep saying that the DVLA have somehow marked it up more than the manufacturer did and this pushed it to the LCT threshold.
I have asked for proof of the list price when it was purchased and what DVLA are claiming now, but as I'm not the owner, I don't have access to this information.

I just wanted to check that my thinking is/was correct - that they cannot charge me for this if it was reasonably known before hand. They can charge me for any increases on this, say £400 to £425, then I am liable for the £25 but not the full amount surely

Hoenir

If you care to share. What's the vehicle ?  Any extra's fitted? 

Car_54

Keep_pedalling said:

Natcole said:

Arunmor said:

To be clear OP you signed the contract in 2023 and the lease company have only raised the issue in 2025?

Yeah that's right. Contract was signed in 2023, car delivery was May or June 2023.
Now they are suddenly saying that the Luxury Vehicle Tax is applicable and wasn't foreseen in known about, hence they can charge me for it.

The contract says:
If it is reasonable to do so we can vary the Regular Payments by giving you at least 30 days written notice solely to the extent necessary to respond to a variation in the following:

1. Any government grant applied to the purchase of a Vehicle with particular characteristics or to a person who is registered as disabled
2. Any change in Vehicle Excise Duty, VAT or any other applicable tax; or b. Any increase in the cost of the Vehicle to us, whether due to import tariffs, other statutory charges and/or manufacturer price increases. See clause 12.1 of the attached terms and conditions

I do not disagree with the payment of the VED increase of £15 plus the VAY as this is an unknown increase which only took effect this year, but for them to say that the car is now valued above the LCT 2 years down the line seems a bit questionable.

If the LCT applied it should have also been payable in May /June 2024 as well. What was the on the road price?

The "on-the-road" price is irrelevant. The £40k limit applies to the manufacturer's RRP (including options) at the date of purchase.

Natcole

Hoenir said:

If you care to share. What's the vehicle ?  Any extra's fitted? 

It is is a VW Golf R.
Standard, extras fitted.
I can't say for sure that it was over 40k list, but I would say it's likely