Drivers may qualify for exemptions from paying car tax under certain conditions. Car tax, officially 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 rate for new vehicles, is currently £195 per year.
Different car tax rates apply to vehicles registered between March 1, 2001, and March 31, 2017. Rates range from £20 annually for vehicles emitting up to 100g/km of CO2 to £760 per year for those emitting over 255g/km of CO2.
Individuals receiving certain disability benefits, such as PIP, may be eligible for up to 100% car tax exemption, particularly if they receive higher benefit rates. Standard rate recipients may receive a 50% discount and can only claim exemption for one vehicle at a time.
Vehicles used by organizations to transport disabled individuals are also exempt from car tax, excluding ambulances. Vehicles manufactured before January 1, 1985, are not subject to car tax requirements. Mobility vehicles and powered wheelchairs are exempt if they have a maximum speed of 8mph on roads and are equipped with a device limiting speed to 4mph on footpaths.
For vehicles not in use and kept off public roads, individuals can apply for a Statutory Off Road Notification (SORN) to avoid paying road tax on the vehicle. Changes in fuel duty rates were announced, including a temporary extension of the 5p per litre fuel duty cut until the end of August 2026 and gradual return to pre-March 2022 levels by March 2027. A new mileage charge for electric vehicles and plug-in hybrids is set to be implemented from April 2028.
Fuel duty, separate from car tax, is included in pump prices, with an additional 20% VAT charged on the total price.
