Officials have given a statement after calls for a VED cut for cars aged 20-39 years amid claims vehicles are being scrapped
The Treasury has issued a significant response to demands for cars manufactured during a specific 19-year window to receive a substantial tax reduction. Drivers have voiced concerns that some vehicles are being scrapped due to the sharp increase in road tax for particular models.
Instead of paying up to £760 annually, people are reportedly having their cars crushed – despite it actually being more environmentally sound to keep them on the road. A petition on the Parliament website has amassed 39,915 signatures – and reaching 100,000 could trigger a parliamentary debate.
The Treasury has today responded to proposals for reducing Vehicle Excise Duty (VED) for vehicles aged between 20 and 39 years. The petition, launched by Heitor Mazzotti, urged Chancellor Rachel Reeves to: “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.”
However, the Treasury has today confirmed there are ‘no plans’ for such a change – though it added the tax would remain ‘under review’: “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.”, reports the Express.
“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.”
At present, vehicles that are 40 years old are exempt from VED and are classified as ‘classics’. The Treasury added: “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. Whilst 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.”
Some of the most desirable cars from 20 years ago have become almost worthless and are destined for the scrapheap due to prohibitive tax costs, industry experts warn. Vehicles emitting more than 225g of CO2 per kilometre face hefty Vehicle Excise Duty (VED) charges – with those producing 201-225g/km paying £430, 226-255g/km £735 and over 255g/km £750.
These bands are due to rise, with the £735 rate set to increase to £760 and the over 255g/km bracket of £750 predicted to hit £790 from April 2026.
The Telegraph reports that it’s not just luxury SUVs with potent engines bearing the brunt – everyday family cars like Ford Mondeos, Saabs, VW Golfs and Vauxhall Zafiras are also impacted. It’s suggested that drivers are scrapping their vehicles due to annual tax bills equalling the car’s actual worth.
The Guardian points out that manufacturing a medium-sized new vehicle can generate over 17 tonnes of CO2e – roughly the same as three years of average UK household gas and electricity consumption. Mike Berners-Lee and Duncan Clark noted: “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.”
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
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
Industry experts caution this is making certain models practically worthless, leading to them being either scrapped or exported to countries where buyers eagerly purchase these cut-price cars, many of which are nearing classic status. Whilst owners of exotic supercars and V8-powered 4x4s may find it difficult to attract sympathy over hefty tax bills, the rules also affect far more modest performance vehicles including the Audi TT 1.8, Vauxhall Zafira VXR, higher-spec Ford Mondeo variants, and even some Volkswagen Golf models.
Drivers wanting the improved grip of four-wheel-drive systems might view a Land Rover Freelander or Subaru Forester as practical alternatives to larger 4x4s, delivering superior fuel economy. Yet certain versions still fall into the highest tax bands, potentially surpassing £800 per year.
Wayne Lamport, who runs Stone Cold Classics in Kent—a dealership focusing primarily on cars from this era—told the Telegraph: “We have to be very careful when we buy stock which is 2006 or more recent. Cars such as a Jaguar X-Type are great, but who wants to pay more than £700 for the annual tax? It doesn’t take many years of ownership to spend the value of the car.
“One example is the Chrysler PT Cruiser. A lot of people love them and think it will be a novelty, but they go off the idea when they realise the annual cost of taxing it. A lot of these cars are virtually unsellable.”
To view and back the petition and see the full response click here.
