Drivers may qualify for an exemption from paying car tax under certain conditions. Typically known as Vehicle Excise Duty, car tax is an annual obligation, although there are options available to spread out the payments.
For cars registered post-April 2017, excluding new vehicles’ first-year tax rate, the standard charge stands at £195 annually. Different tax rates apply to vehicles registered between March 1, 2001, and March 31, 2017, ranging from £20 per year for those emitting up to 100g/km of CO2 to £760 per year for emissions exceeding 255g/km of CO2.
If you receive disability benefits like PIP, you may qualify for up to 100% car tax exemption, particularly if you are on higher benefit rates. Standard rate recipients can benefit from a 50% discount, with only one vehicle being eligible for tax exemption at a time.
Vehicles utilized by organizations to provide transport for disabled individuals are also exempt from car tax, excluding ambulances. Vehicles manufactured before January 1, 1985, are not required to pay car tax.
Mobility vehicles and powered wheelchairs are exempt if they have a maximum road speed of 8mph and are fitted with a device limiting them to 4mph on footpaths. If your vehicle is currently unused and kept off public roads, applying for a Statutory Off Road Notification (SORN) exempts you from road tax for that vehicle.
Recent announcements from Rachel Reeves highlighted the extension of the 5p per litre fuel duty cut by the Conservative government until August 2026, gradually returning to March 2022 levels by March 2027. Additionally, a new charge of 3p per mile for electric vehicles and 1.5p per mile for plug-in hybrids is set for introduction from April 2028.
Fuel duty and car tax are distinct, with fuel duty included in pump prices and subject to a 20% VAT charge.