Car speedometers are not allowed to 'under-read' – they can't tell you you're going more slowly than you really are – but they are allowed to over-read by up to 10 per cent plus 6.25mph. So they could read 50.25mph at 40mph.
How accurate is my speedo?
A speedo must never show less than the actual speed, and must never show more than 110% of actual speed + 6.25mph. So if your true speed is 40mph, your speedo could legally be reading up to 50.25mph but never less than 40mph.
Do speedometers read high?
To offset all of this, and to help prevent you from getting a speeding ticket, most speedometers are designed to read slightly high.