Petition Reduce Vehicle Excise Duty by 50% for vehicles aged 20 to 39 years

Vehicle Excise Duty (VED) is a tax on vehicles used or kept on public roads. Different rates apply to cars, vans, and motorcycles, and the rate for each vehicle is calculated according to a range of factors, such as its date of first registration, weight, or CO2 emissions.

Cars registered before 1 March 2001 pay VED annually based on engine size. Since 2001, the tax system has encouraged the uptake of cars with low carbon dioxide (CO2) emissions to help meet the UK's legally binding climate targets. Cars first registered between 1 March 2001 and 31 March 2017 pay VED annually according to CO2 emissions. From 1 April 2017, a reformed VED system was introduced for new cars. The changes in April 2017 were applied to new cars only, meaning that the tax treatment of existing cars was not impacted.

The majority of an internal combustion engine (ICE) vehicle's emissions come from fuel production and tailpipe emissions. The Department for Transport's 2022 lifecycle analysis shows that the manufacturing emissions for a medium sized petrol or diesel car are estimated to be less than 20% of the lifetime emissions of the vehicle (2020-2030 scenarios). The lifecycle analysis can be found here:

https://www.gov.uk/government/publications/lifecycle-analysis-of-uk-road-vehicles.

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.

Revenue from motoring taxes helps ensure we can continue to fund the vital public services and infrastructure that people and families across the UK expect. For example, by 2029/30, the government will commit over £2 billion annually for local authorities to repair, renew and fix potholes on their roads – doubling funding since coming into office. This record level of funding will enable the government to exceed its manifesto commitment to fix an additional 1 million potholes per year by the end of the Parliament.

While there are no current plans to reduce VED for cars aged 20 to 39 years, the Government keeps all taxes under review, and the Chancellor makes decisions on tax policy at fiscal events.

HM Treasury