VED Exemption Extended On A Rolling Basis

A WELCOME announcement within the 2014 budget is that “the Government will introduce a rolling 40 year VED exemption for classic vehicles from 1st April 2014”.

Adding the rolling feature follows the announcement in the support document issued by HM Treasury shortly after the Budget Statement in March 2013 that the Government will extend the cut off date from which classic vehicles are exempt from VED by one year. From 1st April 2014 a vehicle manufactured before 1st January 1974 will be exempt from paying VED. (Para 2.148, page 84)

VED rates and bands

The VED rates and bands for cars, motorcycles and the main rates for vans will increase by Retail Prices Index RPI from 1st April 2014 but no structural changes were announced. That is in line with the Autumn Statement in 2013 when the Chancellor added the Government has no plans to make significant reforms to the structure of VED for cars and vans in this Parliament. (Para: 2.152, page 76).

VED administrative simplification – abolishing the paper tax disc and payment of road tax by Direct Debit

These measures were confirmed, following their earlier announcement in the Autumn Statement, and are due to be introduced from 1st October 2014. Motorists will be able to pay their VED by direct debit annually, six monthly or monthly should they wish to do so. A 5% surcharge will apply to six monthly and monthly payment but it will make taxing cars so much simpler as you can elect to put the car on a SORN and stop the DD payments in any month and then later take the car off the SORN when the DD payments for VED would resume. (Para 2.154, page 76)

Fuel duty

The Chancellor confirmed the 2p fuel duty increase due in September 2014 is to be frozen. This follows the announcement in the Autumn Statement 2013 that as well as scrapping that increase, George Osborne confirmed that no further rise would take place until at least May 2015 to ease the cost of motoring for the general public and UK business.

To date, fuel duty has now been frozen for over four years, the longest duty freeze for over 20 years. Since their election in 2011, the Coalition has cancelled or delayed all the fuel duty rises that had been announced by the previous Labour administration.

That means compared with the previous Government’s plans, petrol will is around 20p per litre less. That is £11 less every time you fill up or, for a typical classic car use of say 5,000 miles a year, a saving of around £170. (Para 2.152, page 76)

Report by Victor Smith, V8 Register Chairman. A more detailed report can be found here.