Drivers may qualify for exemption from paying car tax under specific circumstances. Car tax, also known as Vehicle Excise Duty, is typically an annual obligation, but payment options can be spread out. The standard rate for cars registered after April 2017, excluding the first-year tax rate for new vehicles, currently stands at £195 per year.
For vehicles registered between March 1, 2001, and March 31, 2017, there are varied tax rates. The rates range from £20 annually for vehicles emitting up to 100g/km of CO2 to £760 yearly for those emitting over 255g/km of CO2.
If you receive certain disability benefits like PIP, you could be eligible for up to 100% exemption from car tax. Higher benefit rate recipients usually receive full exemption, while standard rate recipients receive a 50% discount, limited to one vehicle exemption at a time.
Vehicles used by organizations to transport disabled individuals, excluding ambulances, are also exempt from car tax. Additionally, vehicles manufactured before January 1, 1985, do not require car tax payment.
Mobility vehicles and powered wheelchairs meeting specific criteria, such as maximum speed limits, are also exempt. If your vehicle is not in use and declared as off-road through a Statutory Off Road Notification (SORN), you are not obligated to pay road tax.
In recent announcements by Rachel Reeves in the Budget, the 5p per litre fuel duty reduction initiated by the Conservative government in March 2022 will only be extended until August 2026. Subsequently, rates will gradually revert to March 2022 levels by March 2027. Furthermore, a new per-mile charge for electric vehicles and plug-in hybrids is set to be implemented in the coming years.
Fuel duty, distinct from car tax, is factored into fuel prices paid by drivers, with an additional 20% VAT charged on the total price.
