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Department proposes changes to vehicle duty

Thursday, 13 April 2017

The Department of Infrastructure is seeking to support local businesses and the environment by revising the charges for vehicle duty in the Isle of Man.

Minister Ray Harmer MHK will ask Members to endorse the package of measures contained in the Vehicle Duty Order 2017 at the April sitting of Tynwald.

The proposed changes will result in savings for the owners of commercially-operated vans and goods vehicles, while zero-emissions electric cars will be exempt from paying vehicle tax.

Subject to Tynwald approval, the charging structure for veteran, classic and historic vehicles will be amended, with no fee imposed for vehicles over 40 years old. In addition, all motorcycles with engines larger than 125cc will pay £50 a year, which is below the lowest level of car duty measured on engine size.

The Vehicle Duty Order 2017 is also intended to address the disparity between charges based on engine size (cubic capacity, cc) and those calculated on carbon emissions. Currently, vehicles with high emissions can pay lower duty than less-polluting models simply because they are newer.

Depending on the charging band a vehicle falls under, some owners will see a reduction of £88 in duty, while others will pay between £1 and £31 more with effect from May 2017.

The changes, the first for more than two years, are structured to help generate the income needed to maintain the highways network.

Minister Ray Harmer MHK said:

‘This Order will provide a welcome boost to the many local businesses that use commercial vehicles. Duties for all medium and heavy goods vehicles are being reduced by 5%, while the introduction of a new ceiling of £1,500 will result in more significant savings for some companies.’

‘We recognise that the humble van is the backbone of many businesses in the Isle of Man, so we are introducing a new flat rate of £200 a year for commercially-operated vans. This move will help a lot of businesses in line with the Programme for Government’s objective of promoting an Island of enterprise and opportunity.’

The Minister added:

‘The revenue collected from vehicle duty contributes to the millions of pounds invested in the road network, which in turn supports the economic success and social wellbeing of our Island.’

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