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Budget 2014: Classic car road tax exemption now rolling at 40 years

Published 19 March 2014
  
  

There's good news for classic car owners in the 2014 budget. From April 2014, the classic car exemption from VED will begin rolling from 40 years, with cars built before January 1974 eligible for a zero-rated tax disc. Then, from January 2015, the formerly fixed cut-off, will become a rolling one. 

The measure, which was announced by the Chancellor of The Exchequer, George Osbourne, means that cars such as the Ford Escort Mk2 (above) will now be considered 'tax-free' from next year. The new cut-off date for classic vehicles will take effect from 1 April 2014, and covers all cars manufactured before 1 January 1974, and confirms our prediction that from 2014, VED exemption would move from fixed to rolling. 

In the Overview of Legislation and Tax rates for 2014-'15, the treasury states that the rolling benefit will affect around 10,000 classic car owners per year, who are currently paying VED, but will be newly exempt from 2015. According to the document, which was issued following the budget, the government considers the classic car industry to be an important part of the nation’s historical heritage. According to research by the Historic Vehicle Research Institute and the Federation of British Historic Vehicles Clubs, in its publication The British Historic Vehicle Movement: A £4 Billion Hobby, the historic car industry employs about 28,000 people in the UK. The government also predicts that this change will be revenue neutral for the treasury.

So, from 1 April 2015, vehicles built 40 years ago will be added to the scope of the exemption. The exemption cut-off date in Schedule 2 of the Act will be changed to 1 January 1974 to apply from 1 April 2014 as announced at Budget 2013, and to 1 January 1975 to apply from 1 April 2015 as announced at Budget 2014.

We've already given you a run-down of some of the cool classic cars, introduced in 1973, that will be newly VED-free from April 2014 - and, from January next year, with the rolling exemption set at 40 years, more new cars come in, such as the BMW 3-Series, Ferrari 308, Jaguar XJ-S, Ford Escort Mk2, Princess (below) and Triumph TR7

Also in the budget, it was confirmed that VED - your tax discs - can now be bought and paid for monthly, and you will need to cash in your tax when you sell your car, leaving the next owner liable to buy a new tax disc. This logical move has been introduced to reduce tax administration costs.

Princess _07

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Comments

Winton Wightman    on 19 March 2014

About time! however, don't be surprised if some clot removes it again in the future, as Gordon Brown did in 1997...

l2sh    on 19 March 2014

yep, Labour will kit it when they get in in 2015. Classic cars are the stuff of the rich! My Hunter is 1976 and sods law it will miss out on this

petrolhead63    on 19 March 2014

the article above is ambiguous. It states in opening that all cars built in 1974 will be tax exempt from next month but later states a car built in 1974 will not be exempt until 1/4/15. I think it is the latter that applies.

kadams1970    on 19 March 2014

Opening paragraph tweaked to reflect. Thank you.

One Careful Owner    on 19 March 2014

"Also in the budget, it was confirmed that VED - your tax discs - can now be bought and paid for monthly, and you will need to cash in your tax when you sell your car, leaving the next owner liable to buy a new tax disc. This logical move has been introduced to reduce tax administration costs."

Or, more likely, to earn millions from having two months' worth of payment for a single month's worth of use. After all, how many cars are bought & sold every day?

loz    on 20 March 2014

Yep in 2011 used car sales were 6.7 million. Now lets say half of them cars were sold on Sorn, that would leave 3 million plus cars that the government is going to earn tax revenue on twice (once from the seller & again from the buyer). If we averaged that a £10 a vehicle that will still generate revenue of 30 million pounds, all conned from the motorist.

Still think its a good idea?

Josh Acton    on 19 March 2014

So will my mk1 ford escort be tax exempt if it was registered on the 01/01/1975

Not Yet    on 19 March 2014

Not until next year

kadams1970    on 19 March 2014

It will be from 2015

SH    on 20 March 2014

It will be. It's the build date that counts not the date it was registered.

Trev    on 20 March 2014

If you can prove it was manufactured before 1/1/74 which i doubt, it would be tax exempt. My TR6 was registed oct 74 & just found out it was built november 73 so is now tax exempt HAPPY DAYS GOOD LUCK

Bradley L Carrott    on 20 March 2014

This worked for my old landrover - registered 6 months after the cut off - I wrote to landrover, and they sent me reams of paperwork proving it's manufacturing date - plus all the sign-offs at various points during production, the final test report - everything.

Colmac    on 19 March 2014

But when the Scots vote for independence, Labour will lose all their MPs north of the border and a Labour government will never be elected again. Free road tax forever!!

Matthew    on 20 March 2014

You may think that except there are only 59 MPs in Scotland and not all of them are Labour. This is less than the majorities won by Labour in 1997, 2001 and 2005. So in the three most recent Labour victories, they would have won based on the results of England and Wales alone, albeit with reduced majorities.

wayne    on 19 March 2014

so my 1979 vauxhall royale still doesnt become tax free

Winton Wightman    on 25 March 2014

...until 2019; be patient Wayne, only 5 more years to go, and by then your classic Vauxhall will (hopefully) have appreciated in value more than enough to recoup what you will have paid in VED over that period!...

Sidney Harbour-Bridge    on 19 March 2014

A shame that the MOT exemption won't be rolling, as well.

bartelbe    on 21 March 2014

No it isn't, the MOT exemption was a terrible idea. £50 for the MOT is no big deal, and if they find problems, they should be corrected anyway.

It has caused real problems for owners of pre-1960 cars. Imagine you're in a accident in an MOT exempt car. The suspiscion is going to be it is an old shed, which isn't safe.

The last thing I want is far my 70's car to be MOT free.

Winton Wightman    on 25 March 2014

You state that the MOT exemption "has caused real problems for owners of pre-1960 cars" - could you provide an example? - I have not come across any...

Jay Jay Shuttlewood    on 19 March 2014

does this go for bikes as well???

Boo    on 20 March 2014

Yes. I save £17 a year from April. :)

XJ-Steve    on 20 March 2014

Big deal!! Free VED was initially introduced for vehicles over 25 years old; now it's 40!! 15 years is a hell of a difference and means my 24 year old Jaguar XJ-S and XJ Sovereign won't be eligible for free tax for another 16 years... Thanks for nothing George Osbourne.

Karl zapke    on 20 March 2014

I was always told your car was exempt from rd tax after 25yrs. Guess I was miles out anyway then :(

Daibach    on 20 March 2014

You can thank Gordon Brown for axing the rolling 25 year exemption !
40 years is better than nothing......

Nick    on 20 March 2014

Stop moaning people it used to be fixed pre 74 it is now rolling its better than nothing!

dave benson    on 20 March 2014

Its still a joke!!! Most classics come out on a Sunday, or travel to a show and back, and are not daily drivers the odd one will be, my 84 escort does 1000 a year tops and costs about 250 a year, while the roads are clogged up with so called emission friendly cars paying no tax!! This bill as per usual doesn't go far enough!!

Rich    on 20 March 2014

Gutted that it's not been put back to the old 25 years examtion, like it used to be :-(
I have 2 cars which would now be tax free. Instead, it will still cost me over £200 for each car, even though, over their lifetime, they have paid a small fortune in to the Goverment coffers.
If this continues, mine won't be tax free until 2026 whereas, under the old scheme, they would have be tax free since 2011.
Oh well, this is the second time they have shafted me!
Last time round, I had a Cortina built in 76 and I missed out that time round, when they froze the rolling 25 years examtion! I'll just have tio buy an older car :-)

TY    on 20 March 2014

I was just about to go into print to my MP, the Transport Secretary, about this issue. I recently taxed my 2011 Jaguar XF 3L for £220. I have just put my 1975 BMW 2002 Tii back on the road and had to pay £225. The cars are used privately with the Jag on 7k/year and the Bimmer insured for 1500 miles/year. In fact, it's only done that in the last three years. Just thinking about all the rep mobiles flying around for similar money does not make sense.

Gordon Brown has a lot to answer for - add in the pension debacle and the gold sale - they make the loss of the "classic" tax a drop in the ocean to the coffers. What a plonker!

mb    on 20 March 2014

Just move the ved to the fuel, take average 12000 miles per year as the baseline for an average car 30 mpg to calculate the new increase to fuel. Paying by the mile is the fairest and stops all admin costs and prevents people avoiding payment so more money in the coffers for the government

bartelbe    on 21 March 2014

The good news is it means my car will be tax free in two years. The bad news is it will make affordable classiscs, even less affordable. I can the ads mentioning tax free in a year, and values going up.

adi    on 21 March 2014

great news at last for us classic car owners ....it was a con as mine is only on the road for dry days only!

Leslie Fox    on 22 March 2014

how can reliant robins be tax exempt they were still making them in 2001?

Winton Wightman    on 25 March 2014

Reliant Robins CONSTRUCTED 40 YEARS AGO will be exempt - those built in 2001 will have to wait another 27 years before they are exempt (ie. they will be 40 years old in 2041) - provided the Labour Government does not scrap the rolling VED exemption, as it did with the former 25 year rolling exemption

Lee Griffiths    on 23 March 2014

Boom, finally my '74 car will be tax free from next year - I'm happy.

Dave Harris    on 24 March 2014

I think this is wrong, the VED is NOT rolling. It will be decided each year by the Chancellor. Strange they got this wrong. www.classicandsportscar...

Winton Wightman    on 25 March 2014

This link is to an article published in response to the 2013 budget, not this year's budget!

Dave Harris    on 24 March 2014

Sign here:

epetitions.direct.gov.u...

Winton Wightman    on 25 March 2014

Based on the gov.uk website:

www.gov.uk/government/...

1525 petitioners appear to have signed a redundant e-petition...

Dave Harris    on 25 March 2014

Just found this years news, caught up at last then. Great news.

www.classicandsportscar...

Winton Wightman    on 25 March 2014

According to the gov.uk website, the VED exemption has been extended [sic] to vehicles constructed 40 or more years ago on an automatic rolling basis on 1 April each year..

www.gov.uk/government/...

walkerbrown    on 25 March 2014

So how do you drive home a second hand car you have just purchased, without being pulled by the fuzz for no tax?
Or does the cabinet not have to consider such things - it's only the bingo-playing plebs that cant afford to buy new (from the Jag dealer)...

ado17    on 27 March 2014

The Princess name came later, the three vehicles are Austin/Morris 18/22s and a Wolseley saloon. Petty I know!

hammy01    on 29 March 2014

wondering,, if under this new setup I must cash in my road tax when I sell and the new buyer has to purchase new tax on day of purchase, does it run from day to day and not month to month?

hammy01    on 29 March 2014

also what if I buy a car at 6.30 on a Saturday and don't have access to a computer. I can't take it home till Monday ???

Leslie Fox    on 29 March 2014

so if someone forgets to cash in there old road tax the car will be taxed twice, lucky government

exnomad    on 10 April 2014

Rolling date regulations are fine until the government was to increase revenue, and not roll them. A statement of "over 40 years old would be safer"

lauralouise90    on 16 April 2014

There's likely to be a few teething problems with this but I thinks it's a great move for classic enthusiasts like us! Laura @ Heritage Classic Car Insurance

brandy angelina    on 6 October 2016

Useful discussion , Incidentally , if anyone is searching for a IRS 8404 , my kids saw a blank form here goo.gl/382sxC .

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