9 June 1995

How farm taxation changes affect you

Agricultural vehicle on the road – the legalities of which are often veiled in a greyness that defies the understanding of most. Andrew Pearce begins our Transport Special with a look at the taxation changes due to come into force on July 1

IN an attempt to cut down on abuses and target farm exemptions more accurately, a package of changes to the way agricultural vehicles are taxed comes into force on July 1.

Five key areas are affected – Exemptions, Agricultural Tractors, Light Agricultural Vehicles (ATVs), Farmers Goods Vehicles and Digging Machines – so few businesses will be untouched.

Exempt Vehicles – the changes

The old system allowing tax-exempt vehicles to travel up to 6mls/wk between land in the same occupation, will go. In its place comes the Limited Use tax class.

Any vehicle can fall into this class, if:

&#8226 It is used for purposes relating to agriculture, horticulture or forestry.

&#8226 It travels on public roads only between parcels of land occupied by the same person.

&#8226 The distance it travels on any one trip does not exceed 1.5km (0.93mls). Note: Any number of trips can be made, as long as no single one exceeds the distance limit.

Until July 1, exempt vehicles need not show a tax disc. After Jul 1, exemption certificates will no longer be valid and all vehicles must show a disc detailing their class.

In June, tractor/combine owners currently holding an exemption certificate should receive a relicensing reminder on form V11. This will confirm that their tractor has been put in the new Limited Use class automatically, and you should apply for the free disc at your local licensing Post Office from July.

Agricultural Tractors

Currently, tractors in the £35 duty Special Concessionary class can do any work on the road. To tighten up on abuse by industries outside farming, agricultural tractors can only be taxed for £35 if they meet a new use definition.

&#8226 On-road use will be restricted to work connected with agriculture, horticulture or forestry. Also cutting verges, hedges or trees from the road.

&#8226 Because snow ploughs are in the same excise duty class, snow ploughing will continue to be allowed.

Where a tractor is used on the road for work not connected with agriculture, it must be licensed for General Haulage (£330 tax) and loses the right to use red diesel.

Light Agricultural Vehicles

This is a new division created to define all-terrain vehicles (ATVs), and to allow them into the £35 Special Concessionary class. Hence they can use red diesel where appropriate.

A Light Agricultural Vehicle (LAV) is one:

&#8226 Not weighing more than 1000kg.

&#8226 With a single seat for the driver only.

&#8226 Designed and made primarily for off-road use.

&#8226 Used solely for jobs related to agriculture, horticulture or forestry.


1. Ordinary road vehicles adapted to meet the above will not be allowed into the £35 band.

2. LAVs can only carry or haul goods related to agriculture, etc. Carrying anything else means a shift to the Private Light Goods class, attracts £135 tax and means no red diesel, unless the LAV is exempted under Limited Use classification. So watch out when using an ATV for sporting events or on a non-farming commercial enterprise.

Farmers Goods Vehicles

Very simple, this one. No new or renewal applications for Farmers Goods concessionary tax rates will be accepted from Jul 1. From then, all vehicles will be taxed normally, ie according to their weight. Once your current concessionary license expires, the DVLA will issue a relicensing reminder (form V11), showing the new tax class and duty payable.

A one-year capping scheme aims to help the very few operators who face duty increases exceeding £1000.

Digging Machines

These will no longer be in the £35 duty band. Instead, they move into the Special Vehicles class, attracting (according to weight) £135 or £150 tax in the process. But diggers can still use red diesel, and a machine can still enter the Limited Use class if it meets the appropriate criteria.