George Osborne: no rolling tax exemption for classics

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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

Clatchard

My Triumph TR6 which I have owned for 21 years was first registered on the 1st August 1974. The car was actually manufactured on 31st August 1973 and under the new legislation the VED should apply after April 2014.

From my own point of view, and having just missed out on the exemption and paid full road tax for the last 15 years I am grateful to Mr Osborne for overturning the rather illogical fixed date restriction that Gordon Brown introduced in his first Budget in 1998.

I do however agree that a fairer scheme is required. Restoring the original “rolling 25 years old” exemption might be going too far, but with a 15 year gap between the Brown and Osborne budgets, a 40 years rolling period introduced next April would be an equitable solution and provide continuity for classic cars and motorcycles that will fall in to "no mans land" because they were manufactured after 1st January 1974.

rekeleldorf

One of the car is BMW which is a modern and having every facilities for comfortable. I have a friend who is a dealer of BMW and I already saw this model. Though its so cool but i still prefer to use my old model. If the system requires servicing as part of the car’s service schedule, then you are obliged to have it serviced to keep your warranty valid. I have a two years old BMW bought from new but when i took it in for service, i was asked whether i also wanted the Air-conditioning unit servicing which i have to pay for £106 plus VAT.
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. Osborne 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.

KatherineNorman

Thank you for taking the time to discuss this, I feel strong and love learning more on this topic.
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india

There are many classic cars under 15 thousand - these should be on a rolling thirty year tax free basis.

I have classic  cars which are tax free and those that are not but not at the moment. It's unfortunate I have to pay for 'summer shows' for the 76 but I didn't chose the car on the basis of the tax class.  The concept of each individually costing a fixed sum would be unfair and would cost me more. No. Happy with those with historic status and would prefer a rolling tax rule.  Two are used as daily cars so the choice of limited miles is a personal choice when insuring and should not be linked to insurance. 

bryan123456

The MOT exemption is due to the technology in test centres. It is getting increasingly difficult to marry the requirements of monitoring new and very old vehicles and with tougher legislation on the way, some older vehicles emission and braking performance might be an obstacle.

LeeC

Does anyone know what the latest news is about this? My '73 Vauxhall Victor should be tax exempt from 1st April, and by coincidence the tax disc expires on 31st March. But as of today the DVLA website hasn't changed and still states vehicles must be manufactured before 1/1/73, not 1/1/74.
I've emailed the DVLA too so if they come back with anything useful I'll post it here.
Many thanks.

Grannie Annie

The DVLA don't seem to know that the tax exemption has been extended! I have just been sent a reminder for my Midget - first registered 15/06/1973 and, not knowing about the change, I duly paid the £145 asked for. The tax didn't run out until 30/04/14 but I have been sent a tax disc running to 30/04/15 showing the rate as £145. Will be phoning DVLA on Tuesday - hopefully to get refund.

Ann

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