When does a car become tax exempt?
In the UK, all cars and vans need to pay the Vehicle Excise Duty (VED), also called the road or car tax, to legally drive on public roads. The car tax helps fund essential roadwork and motorway maintenance across the country.
The amount you pay in road tax is determined by your vehicle registration date, C02 emissions, and fuel type. However, there are a few exceptions to these vehicle taxation rules.
Once your car or van reaches a certain age or meets specific government criteria, you are no longer required to pay road tax. However, exemption specifications can change year to year. To help save money, simplify vehicle taxation processes, and keep your car legally on the road, car owners need to stay updated on the latest VED criteria and exceptions.
- Road tax exemptions
- Historic vehicle tax exemption
- Electric and Low Emission Vehicles: Are They Tax Exempt?
- FAQs
Road tax exemptions
A handful of vehicles are ‘exempt’ from road tax, meaning that owners do not need to pay the vehicle tax. Importantly, vehicle owners must still file road tax paperwork, even though they do not have to pay any fees.
The following types of vehicles are exempt from paying road tax:
- Historic vehicles (registered before 1 January 1984)
- Vehicles used by a disabled person
- Disabled passenger vehicles
- Mobility vehicles and powered wheelchairs
- Electric vehicles (EVs) until 2025
- Vehicles with a valid Statutory Off Road Notification (SORN)
- Vehicles used for agriculture, horticulture, or forestry
Unsure of your car’s road tax status? See our comprehensive VED guide for more.
Historic or classic vehicles
To qualify for historic vehicle tax exemption in the UK, cars must be at least 40 years old. If your car or van was built before 1 January 1984 or registered before 8 January 1984, you do not need to pay road tax as of this past April (1 April 2024).
However, you must apply for a vehicle tax exemption to classify your vehicle as ‘historic’ and stop paying VED. Should your application be successful, your car or van will be added to the UK’s Historic Vehicle Register within a few weeks. You will also receive an updated V5C logbook including this historic tax class information.
❗If historic vehicles are still used for hire (aka as part of a taxi service) or used commercially for a trade or business, they must still pay road tax.
Vehicles classified as historic are also exempt from annual MOT testing if they have not undergone any significant changes that affect the manufacturer’s original design. Even though they are exempt from the MOT, these vehicles must remain in a safe and roadworthy condition. Regular maintenance and upkeep are crucial to ensure they meet legal requirements for road use.
Disability transportation
Cars and vans
If a vehicle is being used by a disabled person or by an organisation providing transport for disabled people, it can claim a disability exemption when filing road tax. If qualified, the vehicle will not be subject to road tax fees.
Drivers can only use the disability exemption on one vehicle at a time. Additionally, ambulances do not count as disabled passenger vehicles for road tax purposes.
Visit the DVLA’s website to see if you’re eligible and how to claim.
Mobility vehicles and powered wheelchairs
Other smaller-scale mobility vehicles are also exempt from paying road tax. This includes vehicles that:
- Have a maximum speed of 8 mph on the road
- Are fitted with a device limiting speed to 4 mph on sidewalks
Electric and Low Emission Vehicles
To promote environmentally-friendly automotive practices, the UK government offers many benefits for owners of electric vehicles and low emissions vehicles. These include:
VED exemptions
Fully electric vehicles are exempt from paying VED due to their zero emissions and absence of an engine. This means they are not required to pay road tax until the taxation scheme changes in early 2025. Read our full electric vehicle tax guide for more.
Hybrids currently pay a discounted rate of road tax. This is because they still use traditional fuel as well as their electric motors, leading to CO2 emissions.
If they have zero CO2 emissions, hybrid vehicles and alternative fuel vehicles are road tax-free; check the details of your vehicle for more accurate information.
Benefit-in-Kind (BIK) tax
Electric vehicles also benefit from a low BIK rate for company car tax purposes, currently set at 0%. Plug-in hybrids and some low emission vehicles also have lower BIK rates compared to traditional petrol and diesel cars.
Congestion charges and Clean Air Zones
Across the country, more cities are unveiling Clean Air Zones (CAZs) and Low Emissions Zones (LEZ) to cut back on vehicle emissions in heavily populated areas. Some cities offer exemptions or discounts for electric and low emission vehicles entering these zones, allowing you to continue driving hassle-free.
For example, EVs do not have to pay London’s congestion charge or ULEZ fee, both of which can cost a pretty penny.
Check your car’s emissions status with our free ULEZ Checker tool.
Fuel duty
Electric vehicles are not subject to fuel duty as they do not use traditional fossil fuels.
SORN vehicles
If your car is registered as SORN and off the road, you do not need to pay car tax. You will get a road tax refund on anything you have paid on the remaining months of the year.
It is crucial that you notify the DVLA that your car is off-road. Otherwise, they will assume it’s still being used and fine you for not paying road tax.
Vehicles used for agriculture, horticulture, and forestry
Tractors, agricultural engines, and light agricultural vehicles that are used off-road do not need to pay road tax. Additionally, ‘limited use’ vehicles driven for short journeys of no more than 1.5km on public road between private land are exempt from taxation.
How can I check my car’s tax status?
Learn all you need to know about checking your vehicle’s tax status and renewing your road tax with our comprehensive guide.
FAQs
Is my car tax exempt after 25 years?
After 25 years, some cars are tax exempt if they meet specific criteria. Check to see if your vehicle meets any of the above exception categories and visit the DVLA’s website for more information.
Remember: even if your vehicle is tax exempt, you will legally still need to fill out road tax paperwork. Otherwise, you may risk fines and other penalties.
What makes a car tax exempt?
A car becomes tax exempt based on factors like its age, emissions, and usage. Generally, vehicles over 40 years old are exempt from road tax. Additionally, electric vehicles and those used for disability transportation are also eligible for tax exemption under specific criteria.
Were there recent changes to car tax in the UK?
In the Autumn Statement for 2022, Chancellor Jeremy Hunt announced that EVs will be required to pay VED beginning in April 2025.
Not only will zero-emission cars and vans start paying road tax at the rate of their petrol counterparts, but hybrid cars will also lose their discount on the annual basic VED rate they pay.
Zero emissions cars registered before 31st March 2017 will be required to pay £20 per year.
The Treasury is introducing this policy because the ratio of EV drivers on the road is increasing steadily as we move towards the electric switchover in 2035.
Will I have to pay car tax on electric cars after 2035?
From 2035, new petrol and diesel cars will no longer be sold in the UK. To make up for the shortfall in taxation funds, many experts believe that road tax will continue to apply to EVs (following the 2025 switch to requiring EVs to pay road tax). Whether rates and charges will change again is not yet known. Read our handy guide on buying and selling an electric car for more on road tax changes.
Need to sell your car?
Want to learn more about owning, maintaining, and selling your car? Check out more of our guides here, covering everything from Clean Air Zones to car tax, and plate changes to part exchange.