Drivers may qualify for exemption from paying car tax under specific circumstances. Car tax, officially known as Vehicle Excise Duty, is typically an annual obligation, but payment arrangements can be staggered. For vehicles registered after April 2017, the standard rate, excluding first-year rates for new vehicles, is currently £195 per year.
Different car tax rates apply to vehicles registered between March 1, 2001, and March 31, 2017. The rates vary, starting from £20 annually for vehicles emitting up to 100g/km of CO2 and reaching up to £760 per year for those emitting over 255g/km of CO2.
If you receive disability benefits like PIP, you may be eligible for up to 100% car tax exemption, particularly if you receive higher benefit rates. Those receiving standard rates can avail of a 50% discount, with exemption limited to one vehicle at a time.
Moreover, vehicles used by organizations to transport disabled individuals, excluding ambulances, are also exempt from car tax. Vehicles manufactured before January 1, 1985, do not require car tax payments. Mobility vehicles and powered wheelchairs are also exempt if they have a maximum road speed of 8mph and are limited to 4mph on footways.
If your vehicle is not in use and is off public roads, you can apply for a Statutory Off Road Notification (SORN) to waive the road tax obligation. These measures were highlighted following announcements made by Rachel Reeves in the Budget, detailing fuel duty changes and the introduction of per-mile charges for electric and plug-in hybrid vehicles in the coming years.
Fuel duty and car tax are distinct, with fuel duty included in pump prices and subject to 20% VAT on the total amount.