The Treasury has responded to rising calls for a significant reduction in Vehicle Excise Duty (VED) for cars aged between 20 and 39 years. Many drivers have expressed concerns that the steep tax bills are forcing owners to scrap vehicles that could otherwise remain on the road, contributing to unnecessary environmental waste.
Reports suggest that some owners are opting to scrap well-maintained cars rather than pay annual taxes as high as £760. This trend worries environmentalists, who argue that keeping older, functional vehicles on the road is greener than manufacturing new ones, as it preserves the embedded carbon already spent in production.
A petition launched by Heitor Mazzotti calling for a 50% VED reduction on cars aged 20-39 has quickly gained nearly 40,000 signatures. If it reaches 100,000, it will prompt a parliamentary debate, potentially influencing Chancellor Rachel Reeves ahead of her spring fiscal statement on March 3.
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In its official response, the Treasury confirmed there are currently no plans to reduce Vehicle Excise Duty for vehicles in this age bracket but assured that all taxes remain under regular review. The Treasury statement emphasized that decisions would be made at future fiscal events.
Currently, vehicles over 40 years old are exempt from VED, a status reflecting their classic car classification. This exemption is set to roll forward gradually, with cars built before January 1, 1986 becoming exempt from April 2026. However, the government maintains that factors beyond age—such as vehicle condition and heritage—affect classic car status.
Industry experts report that many desirable cars from around 20 years ago have sharply decreased in value due to rising tax costs, leading to a surge in scrappage. Cars emitting high levels of CO2 face the highest VED bands, with charges poised to increase in April 2026. For instance, vehicles producing more than 255g of CO2 per kilometre will see taxes rise from £750 to £790 annually.
This tax burden isn’t limited to luxury or high-performance vehicles; popular family models like Ford Mondeos, Saabs, VW Golfs, and Vauxhall Zafiras are also heavily affected. As a result, owners often find themselves paying annual road tax equivalent to or exceeding their car’s market value, prompting vehicle disposal.
Environmental experts point out that manufacturing a new car can generate over 17 tonnes of CO2e—comparable to three years of average household energy use in the UK. Extending the life of existing vehicles significantly reduces their overall emissions per mile, making it environmentally beneficial to maintain older, reliable cars rather than replace them prematurely.
Some affected vehicles are being dismantled domestically or exported to countries with less stringent tax regimes. While high-end supercars may absorb these fees more easily, ordinary performance and family vehicles bear the brunt of the tax hikes, impacting models such as the Audi TT 1.8, Vauxhall Zafira VXR, and top-spec Ford Mondeos.
Wayne Lamport, owner of Stone Cold Classics in Kent, highlighted the difficult market conditions for cars manufactured since 2006. He noted that hefty annual taxes, sometimes surpassing the vehicle’s worth, deter buyers, leaving many cars effectively unsellable despite their appeal.
As public debate continues, the Treasury’s commitment to reviewing tax policy offers a window for future adjustments, but for now, owners of vehicles aged 20-39 must navigate the current tax landscape.