Andy Burnham is coming under pressure to help owners of older cars (Image: Getty)
A campaign calling on new Prime Minister Andy Burnham to significantly reduce vehicle tax for certain cars has hit a key landmark. A campaign says perfectly serviceable cars caught in a new tax band at £790 are reportedly ‘being scrapped’.
A campaign is urging the Government to revise the rules has reached a crucial milestone – but people only have 12 days left to back it. Fresh figures highlight a dramatic increase in certain vehicles being sent to the scrapyard, owing to a significant tax trap that is leaving owners facing charges of nearly the entire value of their beloved cars.
Some motorists are now forking out almost £800 a year in tax from April 6, following further Vehicle Excise Duty increases. The vehicles affected are those over 20 years old — yet they must reach 40 years of age to be deemed ‘classics’ and qualify for tax exemption. However, as these cars are now worth very little — frequently under £1,500 — the annual tax bill can account for 25-50% of the vehicle’s total worth, prompting owners to have them scrapped. A petition on the Parliament website is half way to being considered for an MP debate which will put pressure on the new administration – but people only have until August 6 to back it.
It comes after one of Mr Burnham’s first acts was to scrap VAT on household electricity bills from October in a move that could lower energy costs for millions of homes. The government says removing the 5% VAT rate will save the average household around £45 a year. Ministers say the tax cut will be funded by scrapping Keir Starmer’s proposed digital ID scheme.
The Ofgem energy price cap for households on a standard variable tariff is currently 26.11p per kWh, including VAT, for the period from 1 July to 30 September 2026. At that rate, it costs around £26.11 to fully charge a 100kWh electric car from 0% to 100% at home.
If you regularly charge your car at home, that means every charge should become slightly cheaper. Based on today’s capped rate, a full charge for a 100kWh battery would fall from £26.11 to around £24.87, saving approximately £1.24 per full charge.
While that may not sound like a huge saving, it can add up over the course of a year. Charging a 100kWh EV from empty to full once a week could save around £65 annually, while households with more than one electric car or drivers who cover high mileages could save even more.
However, the proposed VAT cut would only apply to household electricity, meaning drivers who rely on public charging networks would continue to pay the standard 20% VAT rate on charging sessions.
A petition on the parliamentary website has now garnered 50,000 signatures — placing it halfway towards being considered for a parliamentary debate, in which the Treasury would be compelled to defend its stance and outline any proposed plans. Created by Heitor Mazzotti, it states: “Reduce Vehicle Excise Duty by 50% for vehicles aged 20 to 39 years. 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.”, reports the Express.
Some of the most sought-after motors from two decades ago are now practically worthless and being sent to the scrapheap because the tax burden has become too steep.
This means that vehicles which emit more than 225g of CO2 per kilometre face hefty Vehicle Excise Duty (VED) charges – with those producing 201-225g/km paying £445, 226-255g/km £760 and over 255g/km £790.
10 popular models hit hardest by VED ‘tax trap’
Model Annual // road tax rate
- Audi TT 1.8T £760
- Chrysler PT Cruiser £760
- Ford Galaxy 2.3 £760
- Ford Mondeo V6 £760
- Jaguar X-Type 2.0-litre Auto £760
- Land Rover Freelander 2 i6 £790
- Saab 900 Convertible £760
- Subaru Forester 2.5 XT £760
- Vauxhall Zafira VXR £760
- Volkswagen Golf R32 £790
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Experts have concluded that it’s significantly more environmentally sound to keep an older car running than to scrap it and buy a newly-built replacement. The Guardian reported that producing a medium-sized new car can generate more than 17 tonnes of CO2 – roughly the same as three years of gas and electricity consumption in a typical UK home.
Mike Berners-Lee and Duncan Clark penned: “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.”
As the petition surpassed 10,000 signatories, the Treasury issued a response. It stated: “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.”
New 2026-2027 car tax rates for vehicles registered between March 1, 2001, and April 1, 2017
- Between 101 and 110g/km – £20
- Between 111 and 120g/km – £35
- Between 121 and 130g/km – £170
- Between 131 and 140g/km – £200
- Between 141 and 150g/km – £225
- Between 151 and 165g/km – £275
- Between 166 and 175g/km – £325
- Between 176 and 185g/km – £360
- Between 186 and 200g/km – £410
- Between 201 and 225g/km – £445
- Between 226 and 255g/km – £760
- Over 255g/km – £790
“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.
“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.