Drivers are being urged to check if they are eligible for a reduced fee or are completely exempt from paying car tax, also known as Vehicle Excise Duty.
You can apply for exemption from paying car tax if you get the:
- higher rate mobility component of Disability Living Allowance (DLA)
- enhanced rate mobility component of Personal Independence Payment (PIP)
- enhanced rate mobility component of Adult Disability Payment (ADP)
- higher rate mobility component of Child Disability Payment
- War Pensioners’ Mobility Supplement
- Armed Forces Independence Payment
You can only use your exemption on one vehicle at a time. If you have more than one vehicle, you’ll need to choose which one will be exempt from car tax.
Recommended reading:
Other benefits have a 50% reduction in vehicle tax. These include:
- PIP standard rate mobility component
- ADP standard rate mobility component
You cannot get a reduction for getting the DLA lower rate mobility component.
The vehicle must be registered in their name or a nominated driver’s name, and must only be used for the disabled person’s personal needs.
How to claim a car tax exemption
You claim the exemption when you apply for vehicle tax.
If you’re claiming for a vehicle for the first time, you have to claim at a Post Office. You must do this every time you change your vehicle.
If you’ve just bought the vehicle and it’s not registered in your name yet, you’ll need to complete a V62 form and include the green ‘new keeper’ slip from the log book with your application.
Drivers are also able to make use of the Motability Scheme if they receive mobility components of certain benefits.
Changes in car tax from April 2025
Drivers of new petrol, diesel and hybrid vehicles are set to face higher first-year tax rates following the Autumn budget.
The first-year Vehicle Excise Duty (VED) for many new cars will be calculated by taking into account the amount of CO2 it produces. At present, electric vehicles don’t incur any VED charges, while cars emitting between 111g and 150g/km pay £220. Those that emit more than 255g/km pay £2,745 for their first year.
However, buyers of electric vehicles are set to pay £10 for their first year’s VED from April and that rate has now been frozen.
In contrast, all other rates of first-year VED are set to rise considerably with rates for petrol, diesel and hybrid vehicles all being increased – with most doubling.
As an example, a new Ford Puma driver can expect a first-year VED rate rise from £220 to £440, while a buyer of a Range Rover could pay as much as £5,490 – up from £2,745 – in that first year of ownership.
An Expensive Car Supplement will see buyers of new cars that cost over £40,000 pay an extra £410 a year for the first five years.
