There was an announcement made by the Chancellor of the Exchequer in the Budget last month that will benefit a number of owners of classic cars that will result in them saving some money. This relates to a change to when Vehicle Excise Duty (VED) is no longer payable.
With effect from the 1st April 2017, vehicles that are in excess of 40 years of age as at the 1st January each year will be permanently exempt from paying VED. This is great news for a number of classic car owners.
There will be some people that feel the Government should have made the period when the permanent exemption applies shorter. Many will probably feel that the period should have been say only 25 or 30 years.
The above announcement will mean that more owners of certain older cars will no longer need to pay road tax. In the current economic climate any saving that people can make to reduce their expenditure has got to be something that will be welcomed by the majority of people. No doubt most classic car owners also have to keep a modern car on the road for which they may well have to pay the road tax unless it is say a company car. So, with effect from the 1st April next year, they will not have to pay the VED on both vehicles as long as the classic car is at least 40 years of age.
This announcement may go some way towards making up for the fact that car owners and that includes classic car owners saw an increase last year in Insurance Premium Tax (IPT) with a further rise being announced in the Budget last month. This has resulted in people having to pay more for their classic car insurance that is something that could have been done without.