Perfectly good cars caught in a new tax band at £790 are ‘being scrapped’ - and a campaign to ask the government to change the rules has reached a key point. New figures reveal a significant surge in certain cars being scrapped due to a massive tax trap which is seeing owners facing charges of almost what their cherished car is worth. Some motorists are now paying almost £800 annually in tax from April 6 following further Vehicle Excise Duty rises.

The cars affected are those which are older than 20 years - but they have to reach 40 to be considered ‘classics’ and be tax exempt. But because these cars are now worth very little - often under £1,500 - the annual tax bill can represent 25-50% of the car’s total value and people are getting them scrapped.

A petition on the parliament website has now reached 50,000 signatures - meaning it is halfway to being considered for a debate in parliament - in which the Treasury would be forced to defend its position and lay out any plans. Created by Heitor Mazzotti it say: “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.”

Some of the most desirable cars from 20 years ago are now virtually worthless and being scrapped because it costs too much to tax them.

It means that cars which produce more than 225g of CO2 emissions per kilometre are hit by Vehicle Excise Duty (VED) - with those producing 201-225g/km paying £445, 226-255g/km £760 and over 255g/km £790.

10 popular models hit hardest by VED ‘tax trap’

Model Annual // road tax rate

• Audi TT 1.8T £760
• Chrysler PT Cruiser £760
• Ford Galaxy 2.3 £760
• Ford Mondeo V6 £760
• Jaguar X-Type 2.0-litre Auto £760
• Land Rover Freelander 2 i6 £790
• Saab 900 Convertible £760
• Subaru Forester 2.5 XT £760
• Vauxhall Zafira VXR £760
• Volkswagen Golf R32 £790

Researchers have determined that it’s considerably more eco-friendly to maintain an older motor on the road than for someone to scrap their vehicle and purchase a newly-manufactured one. The Guardian noted that manufacturing a medium-sized new vehicle may produce over 17 tonnes of CO2 – nearly equivalent to three years’ worth of gas and electricity usage in the average UK household.

Mike Berners-Lee and Duncan Clark penned: “With this in mind, unless you do very high mileage or have a real gas-guzzler, it generally makes sense to keep your old car for as long as it is reliable – and to look after it carefully to extend its life as long as possible. If you make a car last to 200,000 miles rather than 100,000, then the emissions for each mile the car does in its lifetime may drop by as much as 50%, as a result of getting more distance out of the initial manufacturing emissions.”

As the petition surpassed 10,000 signatories, the Treasury has issued a response. It stated: “The Government has no plans to reduce Vehicle Excise Duty liabilities for vehicles aged 20 to 39 years. The Government keeps all taxes under review and the Chancellor makes decisions at fiscal events.

New 2026-2027 car tax rates for vehicles registered between March 1, 2001, and April 1, 2017

• Up to 100g/km - £20
• Between 101 and 110g/km - £20
• Between 111 and 120g/km - £35
• Between 121 and 130g/km - £170
• Between 131 and 140g/km - £200
• Between 141 and 150g/km - £225
• Between 151 and 165g/km - £275
• Between 166 and 175g/km - £325
• Between 176 and 185g/km - £360
• Between 186 and 200g/km - £410
• Between 201 and 225g/km - £445
• Between 226 and 255g/km - £760
• Over 255g/km - £790

“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.

“Revenue from motoring taxes helps ensure we can continue to fund the vital public services and infrastructure that people and families across the UK expect. For example, by 2029/30, the government will commit over £2 billion annually for local authorities to repair, renew and fix potholes on their roads – doubling funding since coming into office. This record level of funding will enable the government to exceed its manifesto commitment to fix an additional 1 million potholes per year by the end of the Parliament.”

To read the petition, sign up and view the full Treasury response, click here.