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, with options available to spread out payments. The standard rate for vehicles registered after April 2017, excluding first-year rates for new cars, currently stands at £195 per year.
For cars registered between March 1, 2001, and March 31, 2017, varying tax rates apply based on CO2 emissions. 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.
Drivers receiving certain disability benefits, such as PIP, may be eligible for up to 100% car tax exemption, particularly if receiving higher benefit rates. Standard rate recipients may receive a 50% discount, limited to exemption for one vehicle at a time.
Furthermore, 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 meeting specific speed criteria are also exempt. If a vehicle is not in use and declared off-road with a Statutory Off Road Notification (SORN), road tax payment is not necessary.
Recent announcements include the extension of a fuel duty reduction until August 2026, with rates gradually returning by March 2027. Additionally, a new per-mile charge for electric vehicles and plug-in hybrids is set to be implemented from April 2028. Fuel duty, distinct from car tax, is incorporated in pump prices with an additional 20% VAT.
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