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ROAD
TAX TRAP - VEHICLE DUTY INCREASES
SCRAPPING
MODERN CLASSICS: APRIL 2026
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UNSUSTAINABLE
POLICIES - ARE FORCING SCRAPPING OF CLASSIC VEHICLES
A campaign which is battling to save thousands of perfectly good cars from being scrapped after they were caught in a ‘tax trap’ is approaching a key milestone. Motoring fans are up in arms that some people will be paying almost £800 a year in tax from this April after further Vehicle Excise Duty rises.
It is called a “tax trap” because these cars are now worth very little - often under £1,500 - but the annual tax bill can represent 25-50% of the car’s total value. This financial imbalance is what often leads to “scrappage by taxation,” where owners scrap a perfectly functional vehicle because the tax bill is uneconomical.
However, scientists have calculated that it’s far more environmentally friendly to keep an older vehicle on the road than for someone to scrap their car and buy a newly-built one. The Guardian reported that producing a medium-sized new car may generate more than 17 tonnes of
CO2 – almost as much as three years’ worth of gas and electricity in the typical UK home.
Mike Berners-Lee and Duncan Clark wrote: “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.” It's only when a vehicle gets to 40 that it's 'safe' and exempt from tax as a 'classic'.
A petition on the parliament website has now reached almost 50,000 signatures calling for the government to reduce Vehicle Excise Duty by 50% for vehicles aged 20 to 39 years. If it reaches 100,000 backers it will prompt a Commons debate, putting pressure on the Chancellor
Rachel Reeves to make changes.
Some of the most desirable cars from 20 years ago are now virtually worthless and being scrapped because it costs too much to tax them. It means that cars which produce more than 225g of
CO2 emissions per kilometre are hit by Vehicle Excise Duty (VED) - with those producing 201-225g/km paying £430, 226-255g/km £735 and over 255g/km £750. And the bands are set to rise with the £735 going up to £760 and the £750 over 255g/km expected to hit £790 from April 2026.
It is not just high-end SUVs with huge engines being hit - it’s normal family cars like
Ford Mondeos, Saabs,
VW Golfs and Vauxhall Zafiras. People are reportedly scrapping their cars due to the huge tax bill each year, which rivals how much the car is worth.
Most pre-2001 cars are simply taxed according to the engine size. Anything below 1,549cc is taxed at £229 a year, while cars with a cubic capacity above this – whether it’s a
Lada or a Lamborghini – are charged £360 annually. After this, the emissions level bands kicked in, although cars registered between March 2001 and 23 March 2006 had the maximum rate capped at the Band K rate, which is currently £430. Experts say this is making certain models almost worthless, leading to them being scrapped or exported to countries where buyers welcome these cut-price cars, many of which are on the cusp of being classics.
While owners of exotic supercars and V8-engined 4x4s might not get much sympathy for the hefty tax bill, the rules also penalise far more mundane sporty models such as the
Audi TT 1.8 and Vauxhall Zafira VXR, larger-engined versions of the Ford Mondeo and even a
Volkswagen Golf.
10 popular models caught in the VED trap
- Model Annual // road tax rate
- Saab 900 Convertible £735
- Land Rover Freelander 2 i6 £760
- Audi TT 1.8T £735
- Ford Galaxy 2.3 £735
- Jaguar X-Type 2.0-litre Auto £735
- Subaru Forester 2.5 XT £735
- Volkswagen Golf R32 £760
- Chrysler PT Cruiser £735
- Vauxhall Zafira VXR £735
- Ford Mondeo V6 £735
Expected new 2026-2027 car tax rates for vehicles registered between March 1, 2001, and April 1, 2017
- Up to 100g/km - Remains at £20
- Between 101 and 110g/km - Remains at £20
- Between 111 and 120g/km - Remains at £35
- Between 121 and 130g/km - Rising from £165 to £170
- Between 131 and 140g/km - Rising from £195 to £200
- Between 141 and 150g/km - Rising from £215 to £225
- Between 151 and 165g/km - Rising from £265 to £275
- Between 166 and 175g/km - Rising from £315 to £325
- Between 176 and 185g/km - Rising from £345 to £360
- Between 186 and 200g/km - Rising from £395 to £410
- Between 201 and 225g/km - Rising from £430 to £445
- Between 226 and 255g/km - Rising from £735 to £760
- Over 255g/km - Rising from £750 to £790
Drivers wanting the extra grip of all-wheel-drive might think a Land Rover Freelander or
Subaru Forester would be perfect and cheaper to run than a large 4x4, but some models still fall into the top bands and could cost more than £800 a year to tax.
The petition says: “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.”
Because the petition reached 10,000 signups the Treasury has responded with a statement. It said: “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.
“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.”
To read the petition, sign up and view the full Treasury response, click
here.
GOVERNMENT
RESPONSE IN FULL
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.
But it has not worked, the potholes are worse than
ever, as local authorities, allegedly, bolster their pension funds, rather
than fix roads. Perhaps the Chancellor should take a look at how it is
that only 5% of your road fund licence, goes to repairing and building
roads?
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
At 100,000 signatures, this petition will be considered for debate in Parliament
....
LINKS
& REFERENCE
https://www.gov.uk/government/publications/lifecycle-analysis-of-uk-road-vehicles
https://www.mirror.co.uk/money/hmrc-issues-473-alert-million-36908694
https://www.mirror.co.uk/money/car-tax-costs-april-2026-36911551
https://petition.parliament.uk/petitions/756814
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