Budget speech announces big changes for modern motorists, with the tax exemption for classics extended to 1 January 1976
Chancellor George Osborne has given his 2015 budget speech, announcing some significant changes for motorists.
Low emission cars have come under scrutiny this year, with the Chancellor calling the current tax system ‘unworkable’ due to the fact that 69 per cent of all new cars sold in the UK qualified for zero VED in the first year.
To combat this, the Chancellor has put forward new plans to tax all new cars based on CO2 emissions for the first year only, switching to a flat rate of £140 thereafter. This will however only apply to new cars after 2017, with cars taxed under the current system continuing to be taxed at the C02-based rates. Electric cars will continue to pay nothing, although a further tax for cars priced over £40,000 was also mentioned, with further details of this to follow.
One exciting prospect is the announcement of a ‘New Roads’ fund by the end of the decade. This basically means that ‘every penny’ generated from motorists paying road tax will then go towards improving the UK’s struggling road system. Fuel duty will remain unchanged.
Little has been said about classic drivers this year, however the cut-off for tax exempt cars will move forward to all vehicles manufactured before 1 January 1976, as announced in the 2014 budget. That means that as of 1 April 2016 thousands of classic car owners with vehicles built in 1975, like the very earliest Jaguar XJ-S and BMW 3-Series models, will no longer be required to pay for road tax.