Classic car owners could be affected by new car tax Vehicle Excise Duty (VED) increases which came into effect from earlier this month.
VED rates rose from April 1 in line with Retail Price Index (RPI) inflation with almost all petrol and diesel owners affected by higher charges.
Owners of classic cars over 40 years old do not need to pay charges due to the historic vehicle tax exemption rule.
However, this is only applicable to vehicles registered before March 1984 meaning classics just shy of this date, registered from 1984 onwards, will still need to pay rates.
According to finance experts at Pete Barden, VED rates increased by around six percent this year.
VED charges for vehicles registered before March 2001 will rise depending on the size of the engine installed in the car.
Those with larger engines above 1,549cc will pay £20 more in 2024 with charges up from £325 to £345.
Charges are a bit lower for those with smaller engines below 1,549cc with rates up to £210 from £200 last year.
The increase is still lower than for other road users with those with vehicles registered between 2001 and 2017 paying up to £40 more depending on how much pollution they emit.
Meanwhile, those driving brand-new combustion vehicles emitting over 255g/km will pay £140 more in the first year.
This is because year-one tax rates for these vehicles are up from £2,605 per year to an eye-watering £2,745.
Campaigners recently pushed for the historic tax exemption to be lowered to keep historic vehicles on the road.
Claire Knight received over 12,500 signatures for the idea which would have seen the exemption lowered to just 20 years.
This would have meant any cars registered before April 2004 would not pay tax fees in a dramatic rule change.
Claire said: “There are vehicles within the 20 to 40 year age bracket that are well-loved, modern classics and without a reduction in tax, we may see these vehicles disappear from our roads.”
However, the plan was categorically rejected by the Treasury who responded to the survey after it exceeded 10,000 signatures.
They warned reducing the threshold would lead to “significantly more vehicles being categorised as classic cars” which would have an effect on revenues.
They added: “The Government has no plans to reduce the tax exemption age for classic cars from 40 to 20 years. While the Government keeps all taxes under review, we consider 40 years a fair cut-off date.”
