Drivers may qualify for car tax exemption under specific circumstances. Car tax, officially known as Vehicle Excise Duty, is typically an annual obligation, but payment options can be spread out. For cars registered after April 2017, the standard rate is £195 per year, excluding the first-year rate for new vehicles. Different tax rates apply to cars registered between March 1, 2001, and March 31, 2017, ranging from £20 to £760 per year based on CO2 emissions.
Individuals receiving certain disability benefits, such as PIP, may receive up to 100% tax exemption, with full exemption for those on higher benefit rates and a 50% discount for standard rate recipients. Vehicles used by organizations to transport disabled individuals are also exempt, except for ambulances. Vehicles manufactured before January 1, 1985, are not subject to car tax. Mobility vehicles and powered wheelchairs meeting specific speed restrictions are also exempt.
Drivers not using their vehicles and keeping them off public roads can apply for a Statutory Off Road Notification (SORN) to avoid road tax payments. Recent announcements include a temporary extension of the 5p per litre fuel duty cut until the end of August 2026, with rates gradually returning to pre-2022 levels by March 2027. Additionally, a new per-mile charge for electric vehicles and plug-in hybrids is set to be introduced in the coming years. Fuel duty, separate from car tax, is included in pump prices with an additional 20% VAT.