George Osborne: no rolling tax exemption for classics

| 21 Mar 2013

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)"