News : Classic car rolling tax exemption re-introduced at 40 years
From April 2014, the classic car exemption from VED will start rolling from 40 years and that means all cars manufactured in 1973 and into 1974 – previously liable for the annual tax – will now qualify for the exemption from the beginning of next month. From January 2015, that will then run from 1975, and on.
The measure, which was announced by the Chancellor of The Exchequer, George Osbourne, means that cars such as the Ford Escort Mk2 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.
In the Overview of Legislation and Tax rates for 2014-2015, it 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 in 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.
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 Jaguar XJ-S, Ford Escort Mk2, Princess, and Triumph TR7.
Also in the Budget, it was confirmed that VED – your tax discs – can now be bought and paid for monthly while 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.