News : Free road tax for pre-1976 classics

Carole Nash Classic Insurance Specialists

Craig Cheetham

Early Wedge will soon be tax-exempt thanks to new VED rules
Early Wedge will soon be tax-exempt thanks to new VED rules

Classic cars made before 1976 will be exempt from UK road tax from next year, it was announced in today’s budget.

Chancellor George Osborne confirmed that the classic tax break wasn’t a one off, which means the rolling exemption for historic vehicles will continue. That means if you own car that was built in 1975, you won’t have to pay Vehicle Excise Duty providing you change the taxation class of your vehicle, which can be done online or in a tax-issuing Post Office.

‘From 1 April, 2016, a vehicle manufactured before 1 January, 1976, will be exempt from paying VED,’ it was announced in the budget.

Free VED is a great 40th birthday present for the Jaguar XJ-S
Free VED is a great 40th birthday present for the Jaguar XJ-S

This is excellent news for owners of classics not previously eligible for Historic tax status, and sees some BL offerings, such as the 18-22 Princess, rubber bumper MGB and Jaguar XJ-S creep into tax-free territory.

Some rubber bumper MGBs are already VED-exempt but now a load more, including this 'Jubilee' variant, will fall into tax-free territory
Some rubber bumper MGBs are already VED-exempt but now a load more, including this ‘Jubilee’ variant, will fall into tax-free territory

The move also suggests that the tax breaks will continue, with pre-1977 cars next, and a rolling exemption from thereon.

Craig Cheetham

A serial impulsive car purchaser, Craig has had his name on over 200 V5s over the past 20 years. 10 per cent of those have been either 800s or Austin Allegros, with between 10 and 20 cars usually owned at any one time. Started out as a local newspaper journalist then worked for car mags including Auto Express, Classic Car Weekly and Land Rover Owner. Worked inside the car industry for a decade as an employee of General Motors, now works for a news distribution agency. Home based, which is dangerously convenient for further irrational heap purchases. Lover of all makes of car since childhood, with a particular leaning towards Austin-Rover... Father of three boys, so hoping to spread the car love. Other passions include rugby union, travelling and eating out.

9 Comments

  1. Here in the USA, we have long had a 25 year rolling exemption for cars and trucks from state or local road taxes, reduced registration fees, from general and pollution inspections and lower insurance rates if register as ‘classic’ or ‘antique’, even able to get special license plates. Such a status may mean limited annual miles (like 5000 miles/year). Such a policy limits abuses and encourages ownership of older cars.

    • Most classic cars get very little use, so they aren’t placing much of a burden on government spending, and tax is generally progressive, so it seems fair that they make a lower contribution to tax revenues. It could be that the cost of administering a very low rate for classic cars might outweigh the revenue it brings.

      You could argue though that the environmental damage caused by classic cars is quite high, so they should still pay towards that. But then keeping them alive might be better than scrapping them.

      Maybe it was just a ‘bribe’ for middle England and Conservative voters?

  2. Whatever the reason, its a nice feeling paying £0.00 for a years road tax!
    A years classic insurance, limited to 3000 miles cost me just £88 for my 1963 Mini, ad to that £35 for an MOT and the limited maintenance it requires doing so few miles makes it a cheap leisure car to keep.

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