Rachel Reeves has hit petrol and diesel drivers once again as the Chancellor rejects calls to change car tax bands ahead of Vehicle Excise Duty (VED) changes. A new Parliament petition had called for the introduction of a new VED band for older cars between 20 and 39 years old.
Currently, cars registered over 40 years old are completely exempt from fees due to the rolling historic tax exemption rule. However, motorists with cars registered in 1987 are still liable for fees, prompting campaigners to call for updates. Poll founder, Heitor Mazzotti, argued that higher tax on older cars was creating a “disposable culture”, where vehicles were scrapped instead of maintained.
They called for the creation of a new tax band which would have seen motorists with cars between 1987 and 2006 charged 50% less than newer cars. The petition garnered intense support, with over 40,000 people signing the poll, prompting the Government to respond.
However, HM Treasury rejected calls for change, suggesting there were “no plans” to shake-up the system.
They responded: “The Government has no plans to reduce Vehicle Excise Duty liabilities for vehicles aged 20 to 39 years. The Government keeps all taxes under review and the Chancellor makes decisions at fiscal events.”
The Treasury argued that revenue from motoring taxes helps ensure we can continue to fund the vital public services and infrastructure. They pointed out that by 2029/30, the government will commit over £2 billion annually on road repair and renewal, including fixing potholes.
Officials argued that the current 40-year limit was “fair”, adding that “many factors” are taken into account when deciding if a vehicle can be considered a classic. The poll also argued that keeping a functional 20-year-old car on the road was “often greener than building a new one”.
In their response, the Treasury added: “At Budget 2014 the Government at the time announced that it would introduce a rolling 40-year exemption from Vehicle Excise Duty (VED) for classic cars.
“This means that currently vehicles constructed before 1 January 1985 are exempt from paying VED. From 1 April 2026, vehicles constructed before 1 January 1986 will become exempt from VED.
“The law does not specifically define a vehicle as historic or classic for registration purposes, and it is widely recognised that there are many factors other than age which influence whether a car is considered classic. The Government at the time therefore set 40 years as being a fair cut-off date to distinguish classic cars from older cars.”
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It comes just weeks before annual inflationary VED price hikes, which will impact almost all petrol, diesel and electric car owners from April 1, 2026.
100,000 signatures are required for the petition to be considered for debate by MPs in Parliament. However, there is still plenty of time, with the current poll scheduled to run until the start of August.
