Explanatory note (accessible version)
Published 18 July 2023
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Clause 1: Vehicle excise duty exemption for foreign vehicles
Summary
1. This clause enabled regulations to be made exempting foreign vehicles, or foreign vehicles that meet certain conditions, from vehicle excise duty. In the first instance it is intended that the power will be exercised to provide for a 3 year exemption in respect of Ukrainian plated and registered vehicles belonging to individuals granted visas under the schemes introduced in relation to the conflict in Ukraine.
Details of the clause
2. The clause inserts new section 5A into the Vehicle Excise and Registration Act 1994. The new section confers a power on the Secretary of State to make regulations exempting foreign vehicles from vehicle excise duty. The details of the new section 5A, inserted by this clause, are as follows.
3. Subsection 5A(1) provides that the Secretary of State may, by regulations, make vehicle excise duty exemptions with respect to foreign vehicles.
4. Subsections 5A(2), (3), (4) and (5) make provision as to the scope of the power conferred by section 5A(1). Specifically, section 5A(2) provides that regulations made under this section may amend subordinate legislation made under the Vehicle Excise and Registration Act 1994 or the Motor Vehicles (International Circulation) Act 1952. Subsection 5A(3) provides that any exemption may be made subject to conditions or for a specified period. Subsections 5A(4) and (5) provide that an exemption may be given, but not removed, retrospectively.
5. Subsection 5A(6) defines expressions that are used elsewhere in that section. In particular, it defines a foreign vehicle as a vehicle that is registered outside of the United Kingdom.
Background note
6. This measure will enable regulations to be made whose effect will be to exempt individuals who have been granted visa clearance under the Family, Sponsor and Extension Ukrainian visa schemes from the requirement to tax their Ukrainian plated and registered vehicles in the UK for a period of 36 months, subject to certain conditions. In addition, the measure would also enable the Secretary of State to make regulations providing for vehicle excise duty exemptions for other groups of foreign registered vehicles if it were considered appropriate to do so.
7. If you have any questions about this change, or comments on the legislation, please contact Jason Donovan, email:jason.donovan@dvla.gov.uk.