Car tax – or Vehicle Excise Duty, as it is officially called – is normally due every year, although there are options to spread out your payments
Drivers can be exempt from paying car tax in certain circumstances.
Car tax – or Vehicle Excise Duty, as it is officially called – is normally due every year, although there are options to spread out your payments.
The standard rate which is charged to all cars registered after April 2017 – excluding the first-year car tax rate for brand new vehicles – is currently £195 a year.
There are different car tax rates for cars that were registered between March 1, 2001 and March 31, 2017. The lowest rate is £20 a year for vehicles that emit up to 100g/km of CO2, rising to £760 a year for vehicles that emit more than 255g/km of CO2.
Who is exempt from paying car tax?
If you get disability benefits: If you claim certain disability benefits, such as PIP, then you can get up to 100% car tax exemption. You normally receive a total exemption if you are receiving the higher rates of your benefit payments.
If you are receiving the standard rates, you will get a 50% discount. You can only be exempt from paying car tax on one vehicle at a time.
Disabled passenger vehicles: Vehicles that are used by organisations to provide transport for disabled people are also exempt from car tax. This does not include ambulances.
Older vehicles: If your vehicle was made before January 1, 1985, then you do not need to pay car tax.
Mobility vehicles and powered wheelchairs: These are exempt if they have a maximum speed of 8mph on the road and they are fitted with a device that limits them to 4mph on footways.
Vehicle is SORN: If you are currently not using your vehicle and it is being kept off public roads, you can apply for a Statutory Off Road Notification (SORN). This means you do not need to pay road tax on that vehicle.
It comes after Rachel Reeves revealed in her Budget that the 5p per litre cut in fuel duty introduced by the Conservative government in March 2022 would only be extended until the end of August 2026.
Rates will then gradually return to March 2022 levels by March 2027. A new 3p per mile charge for electric vehicles (EVs) is also set to be introduced from April 2028, while drivers of plug-in hybrids will be charged 1.5p per mile.
Fuel duty is separate to car tax. It is included in the price drivers pay at the pumps, with VAT at 20% charged on top of the total price.
