What's
the background to this story?
The annual Budget statement made by the Chancellor of the Exchequer,
Alistair Darling, on 12th March 2008 included proposals to raise
vehicle excise duty and confirmed a 2p per litre rise in excise
duty on road fuel would be deferred to October 2008. As usual
we had a report on the Budget up on the V8 website within an hour
of the Chancellor sitting down in the House of Commons. That report
reviewed both the statement and supporting papers available at the
time on the Treasury website. Budget
report & update
But a few weeks later it became clear that there might be more to
the VED changes than had first been thought. Gavin Bailey posted a
note on the VBB highlighting the concerns:
Major
tax in UK RFL for pre Mar 01 cars incl V8 ZT, ZTTs & SVs!
Many members will know that in the last UK budget the Chancellor
announced major hikes in RFL duty for the most polluting cars.
What looked like a major immediate increase in RFL for cars
produced after March 2006 also has major implications for cars
registered after 28th March 2001 with 12 months RFL rising from
the current £210 in graduated steps to £455 from
March 2010. The original announcement was unclear and I thought
pre March 2006 cars were exempt from the massive increase, however
research I have read elsewhere on the web has confirmed my worse
fears.
My personal interest stems from my ownership of a V8 BMW which
falls into this category. Unfortunately this will also catch
the ZT and ZTT V8s and any SVs registered in the UK. In my experience
it is rare for such taxes to be implemented retrospectively,
however maybe this marks the thin end of the wedge for owners
of cars with large capacity high CO2 output engines? Might we
be fighting a rearguard action in future if older cars such
as MGBGTV8s and RV8s are also included?
Gavin Bailey
06 April 2008 @ 03:38 |
Clearly he could
not sleep that night!
In the postings that
followed on the V8BB, it became clear that the "retrospective
feature" of the VRD proposals had appeared by stealth after the
Budget statement. Chris Hunt Cooke felt "these future changes
are simply statements of intent and have not been included in the
Finance Bill, but who knows?" But what was clear was this serious
news had not been widely reported at that stage by the Press.
Since the loss of the 10p tax band, another unpopular feature
of the Budget, took the headlines as a major issue in the run up to
the bi-election in Crewe & Nantwich following the sad death of
the old battleaxe Labour MP, Gwyneth Dunwoody, the former robust chair
of the parliamentary transport select committee, the Government has
been under pressure. With the realisation amongst the public that
some of the poorest wage earners in the country would suffer a loss
of income of around £200 a year, a tidal wave of protest built
up and finally a large group of Labour MPs made it very clear it was
unacceptable. In panic with the bI-election a matter of days away,
the Government announced a £2.7billion package to ease the impact
of the abolition of the 10p tax band. Even with that climbdown, Labour
lost the election to the Conservative candidate by a healthy margin.
Now the stealth VED tax changes and the deferred 2p per
litre excise duty increase on fuel have become another major concern
as the full implications have become more widely recognised. The retrospective
VED increases will affect some of the least well off who have bought
older cars in the 2001-2006 age group and impose an additional £200
or so on their annual motoring costs at a time when motor fuel costs
are rising at an alarming rate. The situation is now very confused
as MPs want Mr Darling to scrap plans for a new £200 charge
on high emission cars registered since 2001 because it would amount
to retrospective taxation of drivers, Government officials say that
as that would cost some £2 billion "we can't do that again
- money does not grow on trees!", and Cabinet ministers hint
that "changes might come in the autumn Pre-Budget Report"
and of course the Prime Minister's office "insists that no plans
were being considered to revise the VED changes". Clearly the
Government is aware that the VED changes are hitting middle class
voters. The Times report adds "it is clear that changes will
be made as the Government tries to appease backbenchers and address
their concerns over changes that are hitting the middle classes"
- the key area for swing voters in any election.
Hauliers mounted a protest rally yesterday as hundreds of lorries
converged on London causing the closure of the A40, one of the capital's
main arteries, so it could be used as a massive lorry park. The protesters
voiced their concerns their industry was at risk with rising costs
and at a disadvantage with continental hauliers who can compete on
better terms for UK business. The lobby group wants "an essential
user allowance" on fuel duty to enable British haulage industry
to compete with companies in European countries where fuel is considerably
cheaper from lower taxation.
Who
do these VED increases affect?
V8 enthusiasts with the MG ZT and ZTT 260 V8 and MG SV models
registered from March 2001 will be caught by these increased
taxes. A number of these models have been registered in that
period and very recently the liquidator of MG Sport and Racing
has been auctioning off some unregistered MG SVs. Also fellow
MG enthusiasts with other MG models registered in that period
will be caught too.
We will report further news as it come in. |
Posted:
28.5.08 |
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Subsequent
postings on this V8BB thread
Gavin, I think the research you have seen is correct. As the
table Victor reproduced in his budget report shows, the highest
band, G, only applies to vehicles registered on or after 23.3.06
and for vehicles registered after 1.3.01 and before that date,
the highest band is F, with VED currently of £210. The
information given on the planned changes for 2009 available
on
http://www.direct.gov.uk/en/Nl1/
Newsroom/Budget2008/DG_073093
refers to the new bands applying to cars registered from 1.3.01,
with no mention of a similar concession for cars registered
prior to 23.3.06. It may be that this is simply an oversight,
these future changes are simply statements of intent and have
not been included in the Finance Bill, but who knows?
I would
not be too concerned about vehicles registered prior to March
2001, if there was any thought of raising their tax rates,
that would surely also have been mentioned in the future plans,
and the fact that this year duty has been raised by £5
both for those under 1550cc and others seems to indicate a
lack of concern.
Where the
owners of older vehicles may be affected is in relation to
the London Congestion Charging Zone, which will change to
an emissions related basis in October this year. The intention
was that all vehicles over 3 litres registered prior to 2001
should also be included in the 'gas guzzler' rate of £25
per day, but actually the regulations are defective and do
not apply to vehicles that pre-date type approval, so at the
moment MGB GTV8s will be exempt! We shall have to see if TfL
manage to correct the defect, FBHVC have lobbied for all historic
vehicles to be exempted, but the response so far has not been
encouraging. Incidentally, for those who are MGOC members,
this month's article in Enjoying MG missed the type approval
point.
Chris Hunt Cooke
06 April 2008 @ 16:10
The footnote to the table I had in my Budget 2008 report says
"* for new cars registered from 23rd March 2006"
so as far as I can see for MGV8s that could only affect unregistered
MGZT260V8s and ZTT260V8s and MG SVs at that date that were
registered after that date. I am not aware of any unregistered
MGBGTV8s or RV8s at or after that date. I suppose some new
V8 Conversions with new shells where an earlier car's identity
is not transferred might also get caught but that would be
rare. So I remain puzzled by the research that both Gavin
and Chris refer too.
Victor Smith
06 April
2008 @ 22:23
Victor, we are referring not to 2008, but to the proposed
charges for 2009 and 2010. The table covering those years,
as per my reference above, does not have the footnote, so
the implication is that the highest rate will apply to all
cars registered after 2001, not just those from 2006 onwards.
This would catch ZT V8s and SVs that are currently covered
by the concession in the footnote. This retrospective aspect
concerns Gavin, who fears that retrospection could go further
back, before 2001, and catch other V8 engined MGs.
Chris Hunt Cooke
06 April 2008 @ 23:14
I am not clear what status the webpage you mention has - is
it part of the Budget 2008 statement clarifications or is
it setting out future Government policy options or possibly
intentions?
Victor Smith
07 April 2008 @ 14:18
It is what
the Government is saying the rates will be over the next two
years, but as I said, has not been included in the Finance
Bill.
Chris Hunt Cooke
07 April 2008 @ 18:43
The highest tax band M will also include more modest cars
such as the Jaguar S Type 3.0l. The MG ZT 190, Jaguar S Type
2.5l and Jaguar X Type 2.5l will be in band L at GBP430 by
2010. The X Type 2.0l petrol will be in band K at GBP310.
This band also includes many 2.0l family cars. The retrospective
application of the new tax bands to all post 2001 cars has
not been noticed by the press.
David Leggeat
08 April 2008 @ 10:37
In a new thread headed Mainstream media catch up with V8BB!
Chris Hunt Cooke revived the thread
We discussed here on 6th April the proposed increase in the
higher rates of VED from 2009, with an element of backdating
for vehicles registered from 2001 to 2006. The main story
in The Times today is on just that point. See http://driving.timesonline.co.uk/tol/life_and_style/
driving/article3842848.ece
Chris Hunt Cooke
30 April 2008 @ 09:12
I heard on the Radio 4 news at lunchtime that MPs have taken
up this issue and are talking of the retrospective VRD tax
on 2001/2006 cars as another Government mess like the recent
10p income tax climbdown. There is also talk of an urgent
need to cancel the 2p increase in excise duty on petrol in
October 2008 as well which would be very welcome news.
Alan Rennie
26 May 2008 @ 14:43
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