| Scrapping the vehicle excise duty (VED) exemption for 40-year-old motors risks harming the classic car industry, worth over £7.2bn to the UK economy, for a possible tax take of millions.
Motoring barrister Richard Clegg said: “Based on DVLA figures from 2023, 297,480 classic vehicles older than 40 years would potentially be liable for VED if the exemption were to be removed. But even if each owner paid the top rate of £360 per year, the tax take equates to about £107m.”
He added: “Classic car ownership is mostly about enjoyment and a discretionary expense. The 2019 National Cost Of Ownership Survey by the Federation of British Historic Vehicle Clubs estimated that an owner spent on average £1,470 per annum per classic vehicle. The additional VED at £360 per year would represent a 24% increase on that 2019 figure which might tip this discretionary expenditure over the edge for many.”
Richard said: “The HMRC’s own 2014 policy document which justified the rolling 40-year VED exemption mentioned that the historic car industry was worth £4bn and employed about 28,000 people in the UK. There are various later estimates but the 2020 National Historic Vehicle Survey by the Federation of British Historic Vehicle Clubs estimated the historic sector (based on 30+ year-old vehicles and including SORN vehicles) as worth over £7.2bn a year and as employing over 34,000 people. Risking harm to that sector does seem like a big risk to take given the potential tax take.”
Ends
For more information, please contact:
Richard Clegg, Automotive Law
T: +44 (0)7977 217136 E: richardclegg@richardclegg.com
Or
David Barzilay, Barzilay Associates
T: +44 (0)7860 322 333 | E: david@barzilay.co.uk
Or
Ella Griffin, Barzilay Associates
T: +44(0)7447 098909 | E: ella@barzilay.co.uk |
