Vehicle Excise Duty (VED) for new motorhomes
Several industry groups have expressed their concern that Vehicle Excise Duty (VED) for newly registered motorhomes increased on 1 September 2019. This Commons Library Briefing Paper provides an overview of how and why these changes will take effect.
RoadsTaxation
Briefing
- Currently, most newly registered motorhomes pay Light goods vehicles (TC39) Vehicle Excise Duty (VED) rates of £260/year. This is because motorhomes (unlike cars) are built, or modified, in stages and the final manufacturer cannot provide an emissions figure for that vehicle. Other vehicles (and some motorhomes) pay VED based on their CO2 emissions. VED rates for vehicles based on their emissions range from £0 for zero emission vehicles up to £2,135 for the most polluting vehicles.
- From 1 September 2019, EU regulation 2018/1832 requires that all new sales of Light Commercial Vehicles be subject to type approval and must provide a vehicle emissions figure. This means that from 1 September 2019 all motorhomes in M1SP (special category) will be taxed based on their emissions – this can be up to £2,135 for the first year for the most polluting vehicles (and £140/year thereafter). This will affect new vehicle registrations from that point on, and not older vehicles already registered.
- Some industry groups have called on the Government to make an “urgent minor amendment2 to the Finance Bill, to reclassify motorhomes as commercial vehicles for the purpose of VED. The National Caravan Council has a campaigns webpage which lists their position statement and supplies evidence in support of this position.
- HM Treasury have not indicated any intention to make such changes.
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