Budget 2017: Tax exemption continues for classic cars

The rolling tax exemption for classic cars is set to continue for the foreseeable future. Although there was no official announcement by Chancellor Philip Hammond in his Spring Budget today, the Government has already confirmed the rolling exemption would be permanent.

Hammond’s predecessor George Osborne confirmed in 2016 so that enthusiasts could place their faith in a rolling system of exemption – rather than wait for the Chancellor or Government of the day to confirm it every year after it was first introduced in 2014.

Tax exemption for classic vehicles is on a rolling basis for 40-year-old vehicles. So, for example, from 1 April, 2017, all vehicles built before 1 January, 1977, will be eligible for free road tax. Notice the key word is built – not registered – which means that it’s worth checking when your car was built if you have a vehicle that was registered very early in 1977.

And take note – if your classic is eligible for historic road tax, it won’t be reclassified automatically. You can find out what you need to do to reclassify your vehicle by clicking here.

The rolling tax exemption is always the subject of much discussion. Supporters say it gives younger classics a lifeline and helps to safeguard the future of our hobby, which is worth an estimated £5.5bn to UK plc.

Critics argue that the 40-year age limit is unfair for many modern classics, with their complex electrical and safety systems. When these fail, even a car as young as ten years old can be deemed beyond economical repair. They argue that the limit should be reduced to 30 or even 25 years.

• Find out everything you need to know about classic car road tax
• See the top ten tax-free classics for 2017