A massive increase in support has placed the government under scrutiny over car tax on 'modern classics' ensnared in a £760 'tax trap' and facing scrappage. A petition on the Parliament website has seen a surge in backing, compelling the Treasury to issue an official response.
Motor industry experts have voiced concerns that hundreds of thousands of cars on UK roads are being 'written off' as owners refuse to pay hefty Vehicle Excise Duty (VED) charges for vehicles too new to be classified as 'classics'. In the UK, vehicles over 40 years old are exempt from VED on a rolling basis, meaning any vehicle built before 1 January 1986 will be exempt from 1 April 2026.
However, some of the most sought-after cars from two decades ago are now virtually worthless and being scrapped due to prohibitive tax costs, according to experts. This means cars emitting more than 225g of CO2 per kilometre are subject to VED - with those emitting 201-225g/km paying £430, 226-255g/km £735 and over 255g/km £750.
These bands are set to rise, with the £735 increasing to £760 and the £750 for over 255g/km expected to reach £790 from April 2026.
The petition has garnered nearly 20,000 signatures this week - obliging the Treasury to respond. If it reaches 100,000 signatures, it will trigger a parliamentary debate, piling pressure on Chancellor Rachel Reeves to clarify the Treasury's stance and outline potential solutions.
A petition launched by Heitor Mazzotti states: "Reduce Vehicle Excise Duty by 50% for vehicles aged 20 to 39 years. Introduce a 50% VED reduction for cars aged 20–39. High taxes force functional vehicles to be scrapped, creating a "disposable" culture. Keeping existing cars is greener than building new ones, as it preserves embedded carbon. This "Young-Timer" bracket supports the circular economy and UK heritage.
"Manufacturing a new car creates massive carbon debt. We must move from a "disposable" car culture to a circular economy. Keeping a functional 20-year-old car on the road is often greener than building a new one, as it preserves the embedded carbon already spent. Current VED rates force many well-maintained cars to be scrapped prematurely. We call for a 50% "Transition to Historic" tax discount to encourage repair, support the UK heritage industry, and reflect the low mileage of modern classics."
Car tax rises to £760 in April 2026 - Mondeo, Golf, Zafira being scrapped Road tax April 2026 rise Treasury update as cars face £5,690 payment
The Telegraph reported it's not merely high-end SUVs with large engines being affected - ordinary family vehicles such as Ford Mondeos, Saabs, VW Golfs and Vauxhall Zafiras are also impacted. Motorists are said to be scrapping their vehicles because of the substantial annual tax bill, which can match the car's actual value.
However, the Guardian highlighted that manufacturing a medium-sized new vehicle can produce over 17 tonnes of CO2e – nearly equivalent to three years of gas and electricity usage in a typical British household. Mike Berners-Lee and Duncan Clark noted: "With this in mind, unless you do very high mileage or have a real gas-guzzler, it generally makes sense to keep your old car for as long as it is reliable – and to look after it carefully to extend its life as long as possible. If you make a car last to 200,000 miles rather than 100,000, then the emissions for each mile the car does in its lifetime may drop by as much as 50%, as a result of getting more distance out of the initial manufacturing emissions."
The majority of pre-2001 vehicles are taxed purely based on engine capacity. Models under 1,549cc face an annual charge of £229, whilst those exceeding this threshold – regardless of whether it's a budget Lada or luxury Lamborghini – pay £360 per year.
Subsequently, emission-based bands were introduced, though vehicles registered between March 2001 and 23 March 2006 had their maximum rate capped at Band K level, currently standing at £430.
Industry experts warn this is rendering certain models virtually valueless, resulting in them being either scrapped or shipped abroad to nations where purchasers eagerly snap up these bargain vehicles, many of which are approaching classic status. While owners of exotic supercars and V8-powered 4x4s may garner little sympathy for their substantial tax bills, the regulations also penalise far more ordinary performance models such as the Audi TT 1.8 and Vauxhall Zafira VXR, larger-capacity versions of the Ford Mondeo and even a Volkswagen Golf.
Motorists seeking the additional traction of all-wheel-drive might consider a Land Rover Freelander or Subaru Forester to be ideal and more economical than a large 4x4, but certain models still fall into the highest bands and could cost over £800 annually to tax.
Wayne Lamport, who runs Stone Cold Classics in Kent, a dealership specialising in vehicles from this period, told the Telegraph: "We have to be very careful when we buy stock which is 2006 or more recent. Cars such as a Jaguar X-Type are great, but who wants to pay more than £700 for the annual tax? It doesn't take many years of ownership to spend the value of the car.
"One example is the Chrysler PT Cruiser. A lot of people love them and think it will be a novelty, but they go off the idea when they realise the annual cost of taxing it. A lot of these cars are virtually unsellable."