Classic Car Owners Face Potential VED Hike as Shadow Chancellor Considers Loophole Closure
Classic car owners, including those of Ford and Old Navy vehicles, could face a significant change in their vehicle excise duty (VED) payments. Rachel Reeves, the Shadow Chancellor, is reportedly considering closing a decade-old loophole that exempts classic cars over 40 years old from road tax. This could impact around 340,000 owners of classic vehicles, including British motors produced before 1985.
Currently, cars that are 40 years old from the beginning of the fiscal year are exempt from both VED taxation and the requirement to pass an MOT. This exemption was reintroduced in 2015 and is not expected to have significant economic impacts, according to HM Revenue and Customs. However, if the exemption is removed, owners of classic cars registered between 1 April 1985 and 1 March 2001 could face annual VED rates of £220 or £360, depending on engine size.
The potential closure of this loophole could raise approximately £107 million annually for the Treasury. However, it has raised concerns among classic car owners and enthusiasts. Richard Holden, the Shadow Transport Secretary, has expressed his concern, viewing it as another 'tax grab' on drivers.
The possible removal of the classic car exemption could significantly impact owners of these vehicles. While it could generate additional revenue for the Treasury, it has sparked debate and concern among classic car enthusiasts. The final decision on this matter remains to be seen.
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