Drivers may qualify for an exemption from car tax under specific conditions. Car tax, officially known as Vehicle Excise Duty, is typically an annual obligation, but there are options available to spread out payments. 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. 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.

If you receive certain disability benefits like PIP, you could be eligible for up to 100% car tax exemption, with full exemption applying to higher rate benefit recipients and a 50% discount for standard rate beneficiaries. Organizations using vehicles to transport disabled individuals are also exempt, excluding ambulances.

Vehicles manufactured before January 1, 1985, do not require car tax payment. Mobility vehicles and powered wheelchairs meeting specific criteria are also exempt. If a vehicle is declared SORN (Statutory Off Road Notification) and not in use on public roads, road tax is not required.

In recent news, Rachel Reeves announced in the Budget that the 5p per litre fuel duty reduction implemented by the Conservative government in March 2022 would be extended until August 2026, with rates gradually reverting to 2022 levels by March 2027. Additionally, a new charge of 3p per mile for electric vehicles and 1.5p per mile for plug-in hybrids is set to take effect from April 2028. Fuel duty, distinct from car tax, is included in pump prices, with a 20% VAT added.