Drivers have the opportunity to avoid paying car tax under specific conditions. Car tax, officially known as Vehicle Excise Duty, is typically an annual obligation, but there are options available for spreading out payments. The standard rate for cars registered post-April 2017, excluding the first-year rate for new vehicles, stands at £195 yearly.
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 yearly for those emitting over 255g/km of CO2.
Certain disability benefit recipients, like PIP claimants, may qualify for up to 100% car tax exemption, especially if they receive higher benefit rates. Standard rate receivers can benefit from a 50% discount, limited to one exempt vehicle at a time.
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 meeting specific speed criteria are exempt as well.
A vehicle declared as SORN (Statutory Off Road Notification) and not in use on public roads is not required to pay road tax. Recent updates from Rachel Reeves revealed the extension of a 5p per litre fuel duty cut until August 2026, with rates gradually returning to March 2022 levels by March 2027. Additionally, a new per-mile charge for electric and plug-in hybrid vehicles is set to be introduced.
Fuel duty, distinct from car tax, is integrated into pump prices, with an additional 20% VAT applied.