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Vehicle Excise Duty (VED or Road Tax) as it applies to motorhomes
BUDGET 2020 - Changes to VED Rates for new motorhomes
From 12 March 2020, the government will reduce annual VED liabilities for most new motorhomes (type approved M1SA) to a flat rate of £265, which will rise to £270 for 2020-21, as motorhome manufacturers and dealers will not be required to provide a CO2 emissions figure when registering new motorhomes with the Driver and Vehicle Licensing Agency. From 1 April 2021, the government will align the VED treatment of new motorhomes and vans.
We understand this to mean that new motor caravans (type approved M1SA) up to 3500kg will again fall into the Private/Light Goods tax class and those over 3500kg will fall into the Private Heavy Goods tax class. It appears that the change will not be retrospective, Motor caravans first registered between 1st Sprtember 2019 and 12 March 2020, with an eligible CO2 emissions figure, will still pay graduated VED, determined by the CO2 emissions, as a petrol or diesel car.
See this HMRC Policy Paper for full details.
VED Increases for New Motorhomes from September 2019
The World Harmonised Light vehicles Test Procedure (WLTP) was introduced in September 2017 to better represent the real-world fuel economy of brand new vehicles and how much pollution they emit when being driven on the road. To further ensure the numbers are as close to what vehicles will emit when driven by customers on a day-to-day basis, a Real Driving Emissions (RDE) cycle - with measurements taken on the road - was also incorporated into the official test from September 2018.
Prior to 1st September 2019, most newly registered motorhomes were subject to PLG Vehicle Excise Duty (VED) rates. This was because motorhomes, unlike cars, are built, or modified, in stages and as the final manufacturer could not provide an emissions figure for the vehicle, there was no requirement to include a figure on the final Type Approval certificate. Other vehicles (and some motorhomes) pay VED based on their CO2 emissions.
From 1 September 2019 new regulations required the CO2 emissions for all cars and commercial vehicles to be stated on the approval paperwork. As a result, because the emissions figures are now included on the Type Approval certificate, a new motorhome with a WLTP Euro 6d/2 engine, first registered with DVLA from 1st September 2019, was, for the purposes of VED, moved out of the commercial vehicle tax band (private lights goods PLG/PHG) and taxed based on its CO2 emissions. See the vehicle tax rate tables for the tax payable.
Rather than go into the full background here, this House of Commons Library Briefing Paper provides an overview of how and why these changes will take effect, and this National Caravan Council Fair Motorhome Tax website gives further information on the implications, and details of a campaign to amend the legislation.
VED RATES FROM 1st April 2018 - Higher rate for the most polluting diesels
Vehicles registered before 1 April 2018 are not affected by the changes
Vehicles in the Diesel Car Class (Tax Class 49) that were first registered from 1st April 2018 pay a higher rate if their Nitrogen Oxides emissions are above a certain level (NOx greater than 80mg/km when tested to RDE standards or RDE2 standards). Check your vehicle tax rate to find out how much you’ll need to pay.
VED RULES FROM 1st APRIL 2017
Vehicles registered before 1 April 2017 are not affected by the changes
The way vehicle tax is calculated for cars and some motorhomes that were first registered with DVLA from 1 April 2017 has changed .
Here is what you need to know if you’re thinking about buying a new vehicle, or one that was first registered after 31st March 2017
Check your vehicle tax rate to find out how much you’ll need to pay.
New motorhomes first registered from 1st April 2017 onward are included if all the following three statements apply:
1) it is in the M1SP Type Approval category - check with your dealer if you’re not sure
2) its CO2 emissions are included on the ‘type approval certificate’ (this might be called a ‘certificate of conformity’ or ‘individual vehicle approval’)
3) its Revenue Weight (GVW or Gross Weight) is 3500kg or less
If no type approval, or the CO2 emissions figure is not recorded on the type approval certificate, the motorhome will be taxed in the PLG tax class (Tax Class 11) if the Revenue Weight is 3500kg or less.
If the Revenue Weight is over 3500kg the motorhome will be taxed in the PHGV tax class (Tax Class 10) irrespective of any type approval or CO2 emissions figure.
The new rates
The amount you paid the first time you taxed your vehicle was based on CO2 emissions.
The amount you pay the second time you tax the vehicle depends on the type of vehicle. You’ll pay:
£140 a year for normal petrol or diesel vehicles
£130 a year for alternative fuel vehicles (hybrids, bi-ethanol and LPG)
£0 a year for vehicles with zero CO2 emissions
New vehicles that cost more than £40,000
If you buy a vehicle with a list price (the published price before any discounts) of more than £40,000, you’ll pay a rate based on CO2 emissions the first time it’s taxed.
When you tax it for the second time you’ll pay one of the new rates (depending on the vehicle) and an additional rate of £310 a year for the next 5 years.
After 5 years, your vehicle will then be taxed at one of the new rates again.
Know your vehicle tax rate
You can check the tax rates for all vehicles if you’re thinking about buying a new or used vehicle.
You can also apply for discount on your vehicle tax if you claim certain benefits .
VED RULES FROM 1st AUGUST 2013
(Update on 2/10/2013)
Up until 1st August 2013 motor caravans had, when first registered, been placed in the PLG or PHGV category for the purposes of Vehicle Excise Duty irrespective of any CO2 figures recorded on the Certificate of Conformity (CoC).
Motor caravans first registered from 1st August 2013 were licensed in a vehicle taxation class based on their CO2 emissions. However this was only the case where a CO2 emissions figure is given for the final stage CoC for the finished vehicle, and for vehicles where the revenue weight was not more than 3500kg.
DVLA and The National Caravan Council have produced a joint statement which explains this issue, it is available here.
VED RULES PRIOR TO 1st AUGUST 2013
This is a resume of DVLA responses to our questions (Updated 27/7/2010)
All vehicle licensing and registration is governed by the Vehicle Excise and Registration Act 1994 (VERA). Classification for taxation purposes depends on the construction of a vehicle and its use on the public road.
Vehicle excise duty (VED) rates for cars and light vans are based on European type approval standards and the date of first registration in the UK. European type approval is the testing that new types of vehicles must undergo to ensure they conform to European safety and environmental standards.
Motor caravans were exempt from type approval requirements (until April 2012) and would therefore normally have been been licensed in one of the following taxation classes. These classes will apply to all motor caravans first registered before 1st March 2001:
Private/Light Goods (TC11): if the vehicle has a revenue weight (GVW) of not more than 3,500kg. This would be the appropriate tax class regardless of its use.
Private/Heavy Goods Vehicle (TC10): if the vehicle has a revenue weight exceeding 3,500kg and the vehicle is not used for the conveyance of goods or burden, for hire or reward or in connection with a trade, business or profession.
These taxation classes also apply to motor caravans first registered on or after 1 March 2001, even if they have been Type Approved under the European Community Whole Vehicle Type Approval system [Note 1]. (Note that this is not the case for most other Type Approved vehicles, which will fall into the Graduated VED classes and the VED payable is dependent on the level of CO2 emmissions)
It is possible that a vehicle may have been registered before its conversion to a motor caravan. In that case it is likely (if registered on or after 1st March 2001 and the revenue weight is 3500kg or less) to have been type approved in the N1 class (light goods vehicle) or possibly in the M1 (Special Purpose) category. In such cases the taxation class will be Light goods vehicle (TC39) or Diesel Car (TC49)/Petrol Car (TC48) respectively
Once a vehicle has been first registered and licensed according to its type approval status as N1 or M1, its status for the purposes of paying VED (i.e. the tax class shown on the V5C) will not change, irrespective of any alteration that may be made to it following its first registration [Note 2].
It is possible for vehicles in other tax classes, following a change of body type to motorcaravan, to relicense in a more suitable tax class.
Euro4 and Euro5
Goods vehicles registered, before conversion to a motor caravan, between 1 March 2003 and 31 December 2006 on the basis of a type approval certificate showing type approval as a Light Goods Vehicle which meets Euro 4 environmental standards would be licensed in the Euro 4 LGV taxation class (TC36). Similarly, goods vehicles registered between 1 January 2009 and 31 December 2010 which meet Euro5 environmental standards would be licenced in the Euro 5 LGV taxation class (TC36). Once a vehicle has been first registered and licensed in these taxation classes, their status for the purposes of paying VED (i.e. the tax class shown on the V5C) will not change, irrespective of any alteration that may be made to it following first registration.
The current rates of duty for all taxation classes are given in the DVLA leaflet V149, available for download as a pdf here: www.dft.gov.uk/dvla/~/media/pdf/leaflets/v149.ashx
We are greatly indebted to the staff of the DVLA for their time and patience in answering all our questions.
This changed on 1st August 2013, motorhomes first registered after this date, where a CO2 emissions figure is given for the final stage CoC for the finished vehicle, were licensed in a vehicle taxation class based on their CO2 emissions.
Previously some Type Approved motor caravans had been placed into the Graduated VED category, meaning that, if they are in Band F or G, too much road tax is being paid. Any owners whose motorhomes were were registered before 1/8/2013 and taxed in the Graduated VED category at Band F or G could consider applying to the DVLA for re-classification.
Of course, any motorhome placed in the lower emissions bands A to E, or the Euro4/5 LGV or LGV taxation classes would be paying more road tax if reclassified as PLG...
In cases where incorrect details were provided at first registration, for example when a N1 goods vehicle was converted to a motor caravan before registration and the converter copied the details from the N1 Certificate of Conformity for the purposes of registration, the DVLA is able to change tax classes if sufficient evidence is provided to warrant the change. Each case will be judged on its merits.
This is an extract from what the Policy Unit told us prior to 1st August 2013:
"To clarify what we agreed on in the past, motorcaravans that have not been type approved will fall to be licensed in PLG or Private HGV depending on their weight.
The area that was causing the confusion was whether M1 Special Purpose motorcaravans could license in the Grad VED taxation class. From the information I've been provided, DVLA would not currently expect to see such motorcaravans in the Grad VED class. Certainly, if an application to register such a vehicle was presented at a DVLA Local Office, I would expect it to be rejected and the vehicle licensed in the appropriate tax class.
Although vehicles such as the Volkswagen California are being type-approved in the M1 Special Purpose category, at the moment, this should not be sufficient for the vehicle to enter the Grad VED tax class. Therefore, as you suggest, I can confirm that all vehicles with the body type 'motor caravan', whether type approved or not, should be placed within either the PLG or the PHGV taxation class."