George Osborne: no rolling tax exemption for classics

17

The Government’s announcement that UK road tax exemption will be extended by a year to pre-’74 classics does not signal the reintroduction of a rolling scheme, C&SC can reveal.

With the extension coming in in April 2014, the 40-year span suggested that the Government's intention might be to go back to the scheme, but today the Treasury insists that an automatic extension of the exemption is not on the cards. Instead it will be decided annually by the Chancellor.

A spokesperson said: “There are no plans to introduce a rolling system [as there had been in the past] instead the dates governing exemption from paying Vehicle Excise Duty will be set by the Chancellor on an annual basis.”

C&SC’s Group Editor James Elliott countered that, unless the exemption continues to be extended each year, yesterday's announcement was pointless except to owners of 1973 classics.

He said: "Obviously, we should be pleased to get anything after this scheme has been in stasis for so long, but what is the purpose of replacing one arbitrary date with another a year later, unless you plan to reintroduce the rolling system?"

The original rolling system exempted all cars more than 25 years old from paying VED in the UK, but that scheme was scrapped in 1997 freezing the cut-off date at classics built before 1 January 1973. Now many more 1970s cars, such as early MGB GT V8s and ‘Oscar India’ Astons will be eligible.

In recent years, both the Federation of British Historic Vehicle Clubs and European body FIVA have been lobbying to have the rolling system reintrioduced, but for classics that are 30 years old.

Also affecting the hobby are new rules governing Statutory Off Road Notification, which means that vehicles will no longer have to be SORN’d annually.

While many welcomed the relaxing of the restrictions, Geoff Lancaster, Communications Director from the Federation of British Historic Vehicle Clubs, said: “Although it has obvious benefits for classic car owners who will no longer need to remember to SORN their vehicles every year, there is concern that a car’s history will be less easy to track.”

The Government has also extended the tax-disc display grace period to 14 days and scrapped a plan to raise fuel duty.

You can download the entire budget here, but the relevant tax-emeption passage reads: "2.148 VED: classic vehicle exemption – The Government will extend the cut off date from which classic vehicles are exempt from VED by one year. From 1 April 2014 a vehicle manufactured before 1 January 1974 will be exempt from paying VED. (Finance Bill 2014)"

Comments

Kenthepipe

Frankly speaking I think the 25 year exemption should now be scrapped, and replaced with say an annual road tax fee of £60 for all classics that are insured on a classic car insurance scheme, and the vehicle does no more than 1500 miles per annum.
The current system is now totally unfair,( An example, my car is insured to cover 1500miles per year, it never does more than 500miles as it,s only taxed for a 6 month period, that 500 or less miles has cost me £121, a tax exempt car can do as many miles as they want.., for nothing !! especially given the values of some classic cars, values for example of around the 60k to 100k.., surely if you can afford cars in these price brackets then £210 per year is totally academic to you?
Not a case of sour grapes, more a case of "fairness".
Iv,e owned my current classic for twenty one years, and yes I could sell it and buy a "Tax exempt one" but I don,t want to !
Surely I cant be the only one who thinks like this ?

Ken,

80, 928 S, 5 Speed

jaredhoke

I have nothing to say about the tax matter at hand, but I am happy to see that photo of an MGB-GT, one of the handsomest and most practical cars Britain ever produced. The one pictured is of a later vintage, alas, so it has been compromised with increased/unnecessary ground clearance and ugly steel wheels instead of wires (and probably Ambla instead of leather upholstery), but be that is it may, it's a beautifully balanced and engaging machine that represents the "best of Britain", and a skill and industry that was unhappily and unnecessarily lost. But this American remembers it, especially when I fire up the totally restored Austin Healey BJ8 phase two I have in my garage and go roaring off for a spin. For me, there will always be an England!

Jared Hoke

Marine on St Croix MN USA

classic0904

Don't see the point of this change just as I couldn't see the point of abolishing MOT tests for pre-1960 cars. Surely Osborne has got more important issues to attend to?

simpatico

I would be cautious about any kind of differentiation between "classics" and moderns. That's when the risk of restrictions/bans on usage could creep in, like in Europe. Weekend only or alternate-day permits, city-centre bans, etc., the insidious ways of the greenines make me shudder. Umwelt zone? Nein Danke!

jasonweldn

Exemption on classy Cars even if taken back wouldn't be a great deal. Someone can buy a highly expensive car could surely pay out the connected taxes.
annuity settlements

RoyC

The only fair system would be to tax cars by road usage: scrap the VED and put the tax on petrol. You pay for what you use.

ROY

carl.g.kirk

I have 2 tax exempt cars ( which aren't worth that much) as well as my modern car but I can only drive one at a time- so why should i pay tax on all three?. It would be much fairer (and ecological) if tax was applied to fuel - the more you use the more you pay!
Anyway,as car tax isn't used to maintain the roads anymore, and the roads now resemble 3rd world cart tracks, I'm questioning how much use I will even get out of my cars on the roads now they are so rutted and pot-holed!

CK

howlison

It would need a lot of work to link tax exemption to classic car insurance
and would be wide open to fiddling! It looks as if Mr Osbourne is aiming for 40 year old cars and I hope he is able to move it each year.
I am very grateful for his help as my classic car was built in 1973, so I may be a little biased by this. If I am right,Ken, you only have another seven years to wait. Chris

Kenthepipe

Hi.., my classic is 32 years old now, and if the "good old" labour party had,nt decided to scrap the 25 year rolling exemption, when they got into power in 97, my car would have been "tax exempt" approx 7 years ago !

As has been said, probably the simplest way would be to remove VED and put it on petrol.., however this government wants it all ways !!! Fair or not, they don,t care.

Ken,

80, 928 S, 5 Speed

Hubatta

How on earth you even being to talk about taxes, when it comes to people live? Car is the common media of communication by which child, young and vulnerable people should be able to go out and enjoy the place where they live, not have to contend with the increasing traffic that uses these roads to race at high speeds. Any traffic calming measures are valid in my opinion; cars do not have a right to push our children and elder people in to their homes, because the area is not safe.

Mercedes Repair Arcadia

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