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.

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.