Drivers may qualify for an exemption from paying car tax under certain conditions. Officially known as Vehicle Excise Duty, car tax 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. The rates range from £20 per year for vehicles emitting up to 100g/km of CO2 to £760 per year for those emitting over 255g/km of CO2.
Drivers receiving certain disability benefits, such as PIP, may be eligible for up to 100% car tax exemption, particularly if they are on higher benefit rates. Those on standard rates can receive a 50% discount and are allowed exemption for only one vehicle at a time.
Additionally, vehicles used by organizations to transport disabled individuals are exempt from car tax, excluding ambulances. Vehicles manufactured before January 1, 1985, are also exempt from car tax. Mobility vehicles and powered wheelchairs with specific speed limitations are exempt as well.
If a vehicle is not in use and kept off public roads, drivers can apply for a Statutory Off Road Notification (SORN) to avoid paying road tax for that vehicle.
Fuel duty, which is separate from car tax, is included in the fuel price at pumps, with VAT at 20% added on top of the total price. Recent announcements indicate that a 5p per litre cut in fuel duty introduced by the government will only be extended until August 2026, followed by a gradual return to March 2022 levels by March 2027. Moreover, a new per-mile charge for electric vehicles and plug-in hybrids is set to be implemented in the coming years.