Time to press government for advance in '72 tax exempt date?
Discussion
The government says that it is making every effort to stimulate growth in the economy, particularly by supporting small businesses.
The Classic and Kit Car industry represents a small but significant and potentially growing part of our British economy.
However, over the years, various pieces of legislation from both the British and European authorities have served only to stifle rather than stimulate our industry.
Some of this legislation can be justified on the grounds of safety or green issues, both for consumers and in the workplace. Fair enough. But when we come to taxation, decisions are often taken for arbitrary reasons.
The tax exempt status for 'Historic' vehicles came into being many years ago now.
It was originally instated on a 'rolling' 25 year old basis. However in 1997, some fourteen years ago, a Labour government froze the entitlement, applying it only to vehicles manufactured before the end of 1972.
It is my opinion that an advance in this date is long overdue and could stimulate business significantly.
I am not necessarily arguing for a return of the 25 year old rolling exemption but surely some new initiative is called for here.
I believe that any loss in revenue in collecting Vehicle Excise Duty on these later 'classic' cars would be miniscule compared with the extra tax raised in fuel tax, VAT and income tax associated with the increase in business and use of these vehicles, to say nothing of the pleasure it would bring to folks indulging in this pastime. Didn't David Cameron say he wanted to make people smile?
Do you agree with my thoughts and, if so, what could we do to influence government policy? Time for a petition?
The Classic and Kit Car industry represents a small but significant and potentially growing part of our British economy.
However, over the years, various pieces of legislation from both the British and European authorities have served only to stifle rather than stimulate our industry.
Some of this legislation can be justified on the grounds of safety or green issues, both for consumers and in the workplace. Fair enough. But when we come to taxation, decisions are often taken for arbitrary reasons.
The tax exempt status for 'Historic' vehicles came into being many years ago now.
It was originally instated on a 'rolling' 25 year old basis. However in 1997, some fourteen years ago, a Labour government froze the entitlement, applying it only to vehicles manufactured before the end of 1972.
It is my opinion that an advance in this date is long overdue and could stimulate business significantly.
I am not necessarily arguing for a return of the 25 year old rolling exemption but surely some new initiative is called for here.
I believe that any loss in revenue in collecting Vehicle Excise Duty on these later 'classic' cars would be miniscule compared with the extra tax raised in fuel tax, VAT and income tax associated with the increase in business and use of these vehicles, to say nothing of the pleasure it would bring to folks indulging in this pastime. Didn't David Cameron say he wanted to make people smile?
Do you agree with my thoughts and, if so, what could we do to influence government policy? Time for a petition?
C£200 a year ved.
Cone off it why should all other motorists pay a tiny amount extra for those running old classic cars? I'd say those that do don't want for much and hardly struggle for this sort of money.
What I would suggest is a fair pay as you go ie a month by month ved so say it's mothballed for the winter then stop the ddebit. It's such a hassle going to the post office one less reason.
I'd prefer it all to be duty at the pumps and no ved at all that's totally fair so even the super frugal cars benefit and those who choose to run 8mpg cars can do so at their own choice of cost
Cone off it why should all other motorists pay a tiny amount extra for those running old classic cars? I'd say those that do don't want for much and hardly struggle for this sort of money.
What I would suggest is a fair pay as you go ie a month by month ved so say it's mothballed for the winter then stop the ddebit. It's such a hassle going to the post office one less reason.
I'd prefer it all to be duty at the pumps and no ved at all that's totally fair so even the super frugal cars benefit and those who choose to run 8mpg cars can do so at their own choice of cost
Welshbeef said:
C£200 a year ved.
Cone off it why should all other motorists pay a tiny amount extra for those running old classic cars? I'd say those that do don't want for much and hardly struggle for this sort of money.
What I would suggest is a fair pay as you go ie a month by month ved so say it's mothballed for the winter then stop the ddebit. It's such a hassle going to the post office one less reason.
I'd prefer it all to be duty at the pumps and no ved at all that's totally fair so even the super frugal cars benefit and those who choose to run 8mpg cars can do so at their own choice of cost
I'm not suggesting any increase for other motorists. I think the additional tax collected from increased business and vehicle use in this sector would more than pay for the exemption.Cone off it why should all other motorists pay a tiny amount extra for those running old classic cars? I'd say those that do don't want for much and hardly struggle for this sort of money.
What I would suggest is a fair pay as you go ie a month by month ved so say it's mothballed for the winter then stop the ddebit. It's such a hassle going to the post office one less reason.
I'd prefer it all to be duty at the pumps and no ved at all that's totally fair so even the super frugal cars benefit and those who choose to run 8mpg cars can do so at their own choice of cost
Tax on fuel only sounds like a good idea but it wont happen for all sorts of reasons.
What I am angling for is something to stimulate a section of the economy. The tax exemption entitlement already exists - what I'm saying is that the arbitrary 1972 cut-off is no longer justified and an advance would be good for the industry and the economy.
Welshbeef said:
Come off it why should all other motorists pay a tiny amount extra for those running old classic cars?
I agree. I used to be quite embarrassed going to the P.O. to get free VED for my Bentley MKVI.What we are talking about here are, on the whole, hobby cars. But there are all sorts of hobby cars out there What's the age of the car got to do with it?
How about free VED for those who have a new Caterham or a Porsche in the garage as a hobby car too?
Or what about OAP Doris in her Micra, who may be doing even fewer miles and days on the road than a classic? Should she not have some consideration too?
I think if you run a car on the public road, you should pay the same and be subject to the same rules as anyone else. MOT/VED/Ins etc.
dave de roxby said:
The tax exemption entitlement already exists - what I'm saying is that the arbitrary 1972 cut-off is no longer justified and an advance would be good for the industry and the economy.
Be careful what you wish for, or bring to the attention of HMG. In the current climate of cuts, this could be a damned good candidate for scrapping altogether.For anyone who reads the weeklys (classic car weekly, Classic Car Buyer) there is talk that free tax could be used as a carrot to limit the amount of miles you can do in the car. For anyone who uses a classic car everyday this is not good news.
I don't mind paying my £200 per year if it means I have the same rights on the road as everyone else.
Of course at the moment there is nothing stopping tax free owners using their cars everyday but it's something the government could bring in the future.
Thats not to say if the rules stayed the same that I wouldn't be pleased if the rolling 25 years came back in as I'd get free tax for both of my cars and for all my traders too!
I don't mind paying my £200 per year if it means I have the same rights on the road as everyone else.
Of course at the moment there is nothing stopping tax free owners using their cars everyday but it's something the government could bring in the future.
Thats not to say if the rules stayed the same that I wouldn't be pleased if the rolling 25 years came back in as I'd get free tax for both of my cars and for all my traders too!
The easy thing to do, to make it fair with regard to the amount of use, regardless of whether it's a classic, hobby or daily driver, would be to put it on fuel.
But nobody wants to see fuel duty increase do they? I wonder what the arithmetic would be? To wholly replace revenue from VED with fuel duty, how much per litre?
I reckon the Qualcast owners club might object though
But nobody wants to see fuel duty increase do they? I wonder what the arithmetic would be? To wholly replace revenue from VED with fuel duty, how much per litre?
I reckon the Qualcast owners club might object though
Balmoral Green said:
The easy thing to do, to make it fair with regard to the amount of use, regardless of whether it's a classic, hobby or daily driver, would be to put it on fuel.
But nobody wants to see fuel duty increase do they? I wonder what the arithmetic would be? To wholly replace revenue from VED with fuel duty, how much per litre?
I reckon the Qualcast owners club might object though
Whatever the economics, they wont do it because the imposition of having to apply for a tax disc once or twice a year means they have a renewable check on ownership - and another means of raising revenue by fines if we don't comply!But nobody wants to see fuel duty increase do they? I wonder what the arithmetic would be? To wholly replace revenue from VED with fuel duty, how much per litre?
I reckon the Qualcast owners club might object though
But I want to underline that 'fairness' is not the point I am getting at here.
Whatever you think about the tax exempt status, there's no doubt it provides a perceived advantage and therefore an incentive to buy, which supports the industry including restorers, parts suppliers etc etc. Which would you buy - a 1972 or a 1973, given the same condition of candidates? All I'm saying is that this is an artificial barrier which could do with advancing - it's been stuck there for 14 years!
There used to be a bit of a lobby for classic car ownership among Tory MPs - wonder if that still exists or they're all too busy cleaning out their moats!
Call me cynial if you like but I have my suspicions why this tax exemption was introduced in the first place and why it has never been revoked (I imagine Gordon Brown having sleepless nights ).It was introduced by Margaret Thatcher at a time when these cars were rocketing in value mainly due to speculators buying them hoping to make a quick profit. Remember, if you are lucky enough to make a perceived profit from your car as a private individual you pay no tax on that profit, much as you dont on your main residence. The governments official take on making these vehicls exempt was that it cost to much to collect the revenue from a relatively small nmber of vehicles, in practice it cost exactly the same but with no revenue. You still needed to insure, mot it and queue up in the post office so that reason can not have been the truth. Incidentally if you now tax your historic on line, not only do the govenment get no money, it actually costs them money to post you the tax disc!!
So why am I cynical? I suspected and still do this was a way of identifying a number of vehicles the government perceived to be growing in value,yes you,ve got it, a form of capital gains tax when you sold.. There are currently over 304000 vehicles (2006 government figure) which are tax exempt, simple maths = £61,000,000. As Blamoral says be careful what you wish for.
In 2004 the government lost £214 million in revenue from people not renewing their tax for a month hoping to get away with it. With ANPR that figure has dropped to £34 million.
I have been a small classic car specialist for a long time, there is not really any growth or potential for significant growth in the industry and much potential for problems. Assuming people would and could use a historic vehicle for daily transport, the cost of maintaining that vehicle would massively outweigh the excise duty you save. Add to that the governments desire to see these cars off the road, the introduction of the "points system" to determine how much of the car is original and we could all be changing our hobby, and that is all it is, into newly liberated worm trainers.
For that reason I,m out.
So why am I cynical? I suspected and still do this was a way of identifying a number of vehicles the government perceived to be growing in value,yes you,ve got it, a form of capital gains tax when you sold.. There are currently over 304000 vehicles (2006 government figure) which are tax exempt, simple maths = £61,000,000. As Blamoral says be careful what you wish for.
In 2004 the government lost £214 million in revenue from people not renewing their tax for a month hoping to get away with it. With ANPR that figure has dropped to £34 million.
I have been a small classic car specialist for a long time, there is not really any growth or potential for significant growth in the industry and much potential for problems. Assuming people would and could use a historic vehicle for daily transport, the cost of maintaining that vehicle would massively outweigh the excise duty you save. Add to that the governments desire to see these cars off the road, the introduction of the "points system" to determine how much of the car is original and we could all be changing our hobby, and that is all it is, into newly liberated worm trainers.
For that reason I,m out.
Edited by thegamekeeper on Sunday 6th February 13:27
Edited by thegamekeeper on Sunday 6th February 13:29
[flame bate]
OK, I'll admit this is a deliberate attempt at stirring up a bit of trouble while at the same time finishing off the normal after Christmas bun fight over the definition of just what is a classic car.
How about keeping the 72 cut off point and defining any pre-72 car a classic and making it illegal to use the word "classic" for any post 72 car. It would also stop of the nonsense of future classic, because they wouldn't ever become one :-)
So just like the VSCC chose the year of 1931 as a cut off point, how about doing the same for 72.
[/flame bate]
Regardless of this I'd still like to add an XJS to my meagre troupe
OK, I'll admit this is a deliberate attempt at stirring up a bit of trouble while at the same time finishing off the normal after Christmas bun fight over the definition of just what is a classic car.
How about keeping the 72 cut off point and defining any pre-72 car a classic and making it illegal to use the word "classic" for any post 72 car. It would also stop of the nonsense of future classic, because they wouldn't ever become one :-)
So just like the VSCC chose the year of 1931 as a cut off point, how about doing the same for 72.
[/flame bate]
Regardless of this I'd still like to add an XJS to my meagre troupe
Sorry but I don't subscribe to the conspiracy theory. The number of cars of a certain age can easily be identified without having to introduce a road fund exemption.
The vast majority of classic cars don't fall into the high value/specualtor category and are owned by enthusiasts not rich playboys. The tax exemption is an encouragement for the majority of us to continue our hobby and hence perpetuate the industry.
The vast majority of classic cars don't fall into the high value/specualtor category and are owned by enthusiasts not rich playboys. The tax exemption is an encouragement for the majority of us to continue our hobby and hence perpetuate the industry.
Balmoral Green said:
Er, because Classic hasn't got anything to do with age. There are plenty of brand new cars that are classics, and plenty of old cars that aren't, and will never be.
Yes. I would personally agree with that. Classic is an ill-defined term in this regard. On the continent, they are frequently referred to as 'old-timers' which covers a multitude of sins - but I can't see that coming into vogue in Britain.On the reasons why tax exemption came into being, I do remember in the very early nineties the then government proposing to tax all registered vehicles, whether they were 'on the road' or not. This sent shivers down the spines of those who kept a hoard of old cars in their back gardens, sheds, barns or garages. Of course, there was an outcry - why should I have to tax a car which is under restoration and may not be back on the road for ten years? It was a tax on ownership rather than use and this was considered a bad precedent.
We also have to remember that this was at a time when computerisation was in its infancy and before things could easily done on the internet. But there was a real problem with vehicles which had simply disappeared off the system, been involved in crime, changed hands and been used untaxed on the road, become a blight in peoples gardens etc etc. Something had to be done - but taxing a vehicle just for existing and being owned was a step too far. What eventually emerged was the SORN system. But to answer the argument that our vehicle heritage would be driven to the scrapyard, the 25 year old tax exempt status came into being. Sadly, Gordon Broon soon put a stop to the fun and froze the exemption.
mph said:
Sorry but I don't subscribe to the conspiracy theory. The number of cars of a certain age can easily be identified without having to introduce a road fund exemption.
The vast majority of classic cars don't fall into the high value/specualtor category and are owned by enthusiasts not rich playboys. The tax exemption is an encouragement for the majority of us to continue our hobby and hence perpetuate the industry.
Yes, agree with the last paragraph. And I personally think that at least some advance in the cut-off date would stimulate business at a time when we need our economy to grow. I know it's a drop in the ocean but every bit helps, hence my proposal.The vast majority of classic cars don't fall into the high value/specualtor category and are owned by enthusiasts not rich playboys. The tax exemption is an encouragement for the majority of us to continue our hobby and hence perpetuate the industry.
Edited by dave de roxby on Sunday 6th February 18:25
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