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Do You Know Classic Car Tax Rules

Tax Rules are Changing: Do You Know How Much You Should Pay?

The rules on taxing cars are changing, and these changes are going to impact both modern and classic motors. How good is your understanding of the effect these changes will have on you? If you’re not a bona fide expert on car tax, then read on and we’ll talk you through what the forthcoming developments mean for motorists.  



Road Tax: The Basics




Photo of car tax disk in windscreen



The little round piece of paper which is currently plastered to your windscreen has been with us since 1921, but, as with most other things, the relentless forward march of technology is about to make it obsolete.



Digital mediums now allow the tax, MOT and insurance status of your vehicle to be checked against a central database, making paper disks unnecessary. From the 1st October 2014, you will no longer need to display yours.


Come renewal time, you’ll also find that you’re now able to pay online, via the phone or at the post office. In a further change, you’ll be able to choose whether you want to make your payments through monthly, biannual or annual direct debit (although the first two will incur a five per cent charge).


Additionally, road tax will no longer transfer with the vehicle, meaning that new owners will always be responsible for buying tax before they can hit the road. Those selling a car after this date will receive an automatic refund of any full calendar months of tax remaining, provided they notify the DVLA of the sale.


Some details of the scheme are still being finalised, so take a look a www.gov.uk to keep up-to-date with developments.





The changes to classic car tax rules will be favourable to most vintage car owners. In a move signalling their recognition of the part classic car owners play in the UK economy, the government has stated that the exemption from road tax, previously fixed at 40 years, will soon become a rolling one.


For this year, owners will only be eligible for a zero-rated tax disk if their car was manufactured or first registered before 1st January 1974. From April 2015, however, the exemption will no longer be fixed, meaning that vehicles manufactured or first registered before 1st January 1975 become eligible, and from April 2016 it will be 1976 models, and so on. This is certainly good news for those looking to save money, as it means that the number of classics eligible for a zero-rated task disc will significantly increase.  



What Should You Do When Your Car Reaches Exemption Status?


If your car reaches the point of exemption, it’s really easy to register the change. All that you need to do is complete the seventh section in your logbook, known as VC5.


 State that the class is ‘historic vehicle’, and then take the document and MOT certificate to a post office. The staff will send it to the DVLA so that the necessary changes can be made. If you do this prior to 1st October 2014, you’ll be handed the zero-rated tax disc to display. Do it after this date, and you’ll find that everything has already been digitised. 


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