The January sitting of Tynwald approved changes to vehicle duty which will come into effect on 1st April.  The changes include a general increase in duty of 6% in order to maintain the value of revenue which is used towards maintaining highways and they will also begin to address the anomaly that occurred when emission based duty was introduced in April 2010 which means that two identical cars can be charged different rates of duty depending on when they were first registered on the Island.

Whilst the Department understands that vehicle operating costs are continuing to increase when general standards of living are not, many highways need to be repaired and therefore it is essential that the income generated from this duty continues to meet inflationary costs.

In order to address the anomaly of the same vehicles being charged different rates of duty, a two phased approach is proposed.  Phase 1 will be introduced on 1st April 2012 and Phase 2 in 2013/14.   Phase 1 applies to vehicles registered in the Island on or after 1 April 2010 but first registered elsewhere before 1 April 2008.  Where the information on emissions is available, these vehicles currently pay vehicle duty based on CO2 emissions and they will be moved to duty based on engine capacity, unless the CO2 emissions of the vehicle would attract a lower rate of duty, in which case the vehicle would continue to pay duty based on emissions.   It is proposed that Phase 2 of the process of getting most vehicles on a similar charging basis would be introduced in 2013/14, when vehicles registered in the Island but first registered elsewhere between 1 April 2008 and 31 March 2010 will be moved to duty based on engine capacity unless the duty based on CO2 emissions is lower.  Phase 2 will be subject to Tynwald approval later this year.

David Cretney, Minister for Infrastructure said “these measures should start to rectify the anomaly of two vehicles of the same age, make and model being subject to different duty and it is anticipated that it will assist vehicle traders by reducing barriers that currently exist with some ages of vehicle.  It is felt that when the two phases have been completed all vehicles registered on the Island from October 2008 when CO2 emissions were first recorded will be subject to the same rate of duty. “

All new vehicles and vehicles first registered elsewhere after 1st April 2010 will continue to be charged vehicle duty based on CO2 emissions.

For those vehicles affected by the changes, annual vehicle duty reminders will be issued with the correct duty shown and members of the public are reminded that vehicle duty in most cases can be paid online.

The new rates of duty are displayed on application forms which are available on the Highways website http://www.gov.im/transport/highways/DandV/forms.xml