IoM Warns Of Upcoming New Vehicle Duty Rates

by Jason Gorringe, Tax-News.com, London

14 March 2011

The Isle of Man Infrastructure Department has reminded taxpayers that new vehicle duty rates, paid on registration, are effective from April 1 following a public consultation held from between July 26 and September 7 last year, as legislated for in the new Vehicle Duty Order, passed by Tynwald in January 2011.

A 5% increase in all vehicle categories will be introduced, except for motorcycles and very light cars or vans, for which the duty will remain the same. The emissions bands, used for vehicles registered after April 1, 2010, will not be applied retrospectively, however; as a matter of course with the passage of time more vehicles will be taxed on the basis of their emissions. The Department estimates that over 20% of vehicles in use will be taxed on that basis by March 2012, creating a strong incentive for those buying new vehicles to buy more environmentally friendly models.

The new bands for motorcycle duty in 2010 have been amended and all motorcycles with an engine size of over 400cc will be charged the same rate of GBP60. This represents a reduction on the much higher previous rates which were considered both anomalous and unfair.

Vehicle duty for veteran vehicles will be reduced from GBP20 to GBP10 to reflect the public view and for the first time there will be a fixed cut-off point of 1987 for a vehicle to retain veteran status. This means that any non-commercially used vehicle registered or manufactured before January 1, 1987, will be entitled to the duty rate of GBP10. Any vehicle registered or manufactured after this time will be taxed on the full current duty rate.

In further supporting the government initiative to reduce its carbon footprint, the Department has introduced a discount provision for all heavy goods vehicles over 7,500kgs that are manufactured to Euro 4 and Euro 5 standards. A 25% discount on duty is to be given to heavy goods vehicles over 7,500kgs that conform to Euro 4 standards and 50% discount to those conforming to Euro 5 standards.

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