BUDGET 2016: GREAT NEWS FOR CLASSICS!
Rolling VED exemption confirmed at 40 years, but the FBHVC wants the bar set lower to 30
Chancellor of the Exchequer, George Osborne has confirmed that the Government will be making the 40-year VED exemption for classic cars permanent from April 2017. Since the exemption date was changed in March 2014, it has been renewed on an annual basis during the Budget, but until now was not confirmed as a permanent measure. It effectively anchors the official age of historic, therefore tax-free, status to cars over 40 years old. But this move goes against the Federation of British Historic Vehicle Clubs, which says it wants the rolling tax break extended to vehicles over 30 years old.
The Government has confirmed plans to exempt classic cars over 40 years old from road tax permanently.
Chancellor of the Exchequer George Osborne’s Budget document, released on 16 March, announced that the Government will legislate to introduce a rolling VED exemption for classic vehicles from 1 April 2017. It states: ‘[From that date]... each year vehicles constructed more than 40 years before 1 January of that year will automatically be exempt from paying vehicle excise duty.’
The Federation of British Historic Vehicle Clubs alerted followers of its social media streams to the taxation news immediately. It welcomed the VED announcement, but said it wanted it to apply to cars over 30. Geoff Lancaster, FBHVC communications director says: ‘We would have liked the Chancellor to recognise that the internationally accepted date for qualification as an historic vehicle is 30 years, not 40 years.
‘We have done the maths and concluded that the impact on the treasury of such a concession is fiscally insignificant. For our members, it would have the effect of encouraging the preservation of the later (less expensive) cars and it is these that are most accessible to the younger enthusiasts who tend to have less to spend and who we are keen to encourage into the movement.’ Chris Baker from Nottingham took to
CCW’s Facebook page to ask: ‘I have a 1996 Jaguar XJ-S and it’s £230 a year to tax. It does 1000 miles a year and never goes out in the rain, and it doesn’t get used in peak times. My dad has a (modern) Audi A4 TDI (diesel). It does 15,000 miles a year and he pays £30 a year road tax. How is this fair?’
Away from VED, fuel duty has been frozen for the sixth year in a row. It has been held at 57.95p per litre since March 2011. Brian Madderson. chairman of the Petrol Retailers Association says: ‘The announcement will save households an average of £75 a year.’
Historic vehicle taxation applies to when the car was built, rather than sold. A car registered after the cut-off date will still be granted a tax break, as long it’s possible to prove its date of build.