Drivers have the opportunity to avoid car tax under specific conditions. Vehicle Excise Duty, commonly known as car tax, is typically an annual obligation, but there are options for payment flexibility. For cars registered after April 2017, the standard rate stands at £195 per year, excluding the first-year rate for new vehicles.
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 annually for those emitting over 255g/km of CO2.
If you receive disability benefits like PIP, you may qualify for up to 100% car tax exemption, with full exemption for higher rate beneficiaries and a 50% discount for standard rate recipients. Only one vehicle can be tax-exempt at a time.
Vehicles used by organizations to transport disabled individuals, excluding ambulances, are also exempt from car tax. Additionally, vehicles manufactured before January 1, 1985, are not required to pay car tax.
Mobility vehicles and powered wheelchairs meeting specific speed criteria are 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.
In related news, Rachel Reeves announced in the Budget that the 5p per litre fuel duty reduction, effective since March 2022, will continue until August 2026, gradually returning to 2022 levels by March 2027. New charges of 3p per mile for electric vehicles and 1.5p per mile for plug-in hybrids are scheduled for April 2028.
Fuel duty, a separate charge from car tax, is included in pump prices with an additional 20% VAT.