New tax proposals could see poorer bikers penalised

Following yesterday’s Budget, the HM Treasury has issued a ‘call for evidence’ to assess changing the way VED tax is charged for motorcycles on UK roads. The suggestion is to move to a CO2-based system like car drivers pay now, where the higher the carbon dioxide emissions of the vehicle, the higher the rate of tax you pay.

This move is geared towards encouraging the purchase of modern bikes, adhering to the latest emissions standards, and could have a significant impact on the secondhand market as the older, highest-polluting models are likely to be hit hard. It’s likely to be good news if you can afford to buy a new bike, however.

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At present the VED for motorbikes is charged at a simple engine capacity-based rate. If you have a motorbike displacing less that 150cc, you pay £20 a year, while 151-400cc bikes cost £43 a year. The next threshold is 401-600cc, which is £66, and over that it’s £91.

However, the proposal document says: “The government now has data on the carbon emissions of different motorcycle models. This provides scope to for charging VED on motorcycles the basis of their carbon emissions, which could encourage the purchase of the cleanest models.”

The other issue is bikes that do not have stated CO2 emissions from the manufacturers because they’re old enough that it wasn’t recorded. 

In that case, the bikes are likely be to placed in bands based on their engine size, which could see large displacement older models (some BMWs and Harleys for instance) with exorbitant year taxes.

So big changes could be on the way for bikers paying VED, and the Government is calling for opinions on the following questions:

• Do you think motorcycles should be taxed based on carbon emissions?
• What impact would this have on the behaviour of those looking to purchase a new motorcycle?

If you’ve got responses to these queries, you’re invited to send them to ETTAnswers@hmtreasury.gov.uk

The call for evidence will be open for the next 12 weeks, closing on Wednesday June 3, 2020.