Classics To Stay Tax-Exempt In UK Following Budget

The UK’s 2025 autumn budget hasn’t brought much to smile about for drivers of any stripe. Those buying EVs and PHEVs from April 2028 will have to pay a new pay-as-you-go tax to recoup lost fuel duty as more cars go electric, while those sticking with petrol and diesel may face an uptick in fuel costs in a few months’ time when the temporary freeze on said fuel duty ends.

There is some good news for one specific group of drivers, though: the 350,000-plus who own cars that are over 40 years old. In 2014, they began to benefit from a new rule that would see their cars exempt from vehicle excise duty – road tax, as literally everyone calls it – and that’s updated on a rolling basis since, meaning that right now, cars registered before 1985 aren't subject to the charge.

There was much speculation in the press leading up to this year’s budget that the exemption would be scrapped, but at today’s announcement, Chancellor Rachel Reeves confirmed that it will remain in place.

Cars of 40 years and above are also exempt from MOT testing, and this too is remaining in place, although Reeves has emphasised that this exemption will be under review for the next few years.

Nevertheless, if there was ever a reason to start looking into a usable classic car, this is it, with the early-to-mid-’80s serving up plenty of attainable retro heroes. If you want some inspiration, we’ve put together a list of cool, affordable ’80s cars, many of which were launched before the current 1984 cutoff. 

Meanwhile, when the next financial year starts in April, it’ll unlock the exemption for cars built in 1985 too – that’ll see early examples of legends like the original BMW M5, Ferrari 328, and Porsche 944 Turbo become tax-exempt. Also the Ford Scorpio.