Elderly drivers may be able to escape higher car tax fees being introduced in the next year, which could save some motorists hundreds or even thousands of pounds.
Chancellor Rachel Reeves announced in October that Vehicle Excise Duty (VED) rates would be rising in the new financial year in line with the rate of inflation (RPI).
This is alongside huge tax hikes to first year tax rates for new vehicles registered on or after April 1, 2025.
This was backed by the Chancellor to further incentivise drivers to switch to zero emission vehicles, which retain the cheapest costs after April, and avoid new petrol and diesel vehicles.
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Elderly drivers and those who receive benefits could see massive savings on their car tax payments
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Drivers are being urged to check if they are eligible to avoid paying Vehicle Excise Duty if they have certain conditions or receive benefits.
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.
Drivers are able to apply for an exemption if they receive 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
Guidance from GOV.UK website outlines that drivers can only use the exemption on one vehicle at a time. They will need to choose which vehicle is exempt if they have multiple.
Drivers will be able to claim the exemption when they apply for vehicle tax. A claim must be made at a Post Office branch if they are claiming for a vehicle for the first time.
Britons can also get a 50 per cent reduction on their VED payments if they have the PIP standard rate mobility component or the ADP standard rate mobility component.
To claim, motorists must have a letter from the Department for Work and Pensions which shows their PIP rate and the dates they received it, or an ADP decision letter from Social Security Scotland.
Alongside this, they will need the V5C vehicle log book, a V10 form, evidence of a current MOT, an original goods vehicle testing certificate (if necessary), a cheque or payable order for 50 per cent of the full rate of car tax, and an insurance certificate or cover note if they live in Northern Ireland.
Drivers are also able to make use of the Motability Scheme if they receive mobility components of certain benefits.
Alongside the inflation hikes in April, Labour will also oversee a rise in the amount paid for the first year rates for new cars registered on or after April 1, 2025.
The lowest polluting vehicles will see prices rise slightly, with owners of new zero emission cars paying £10, those emitting 1-50g/km of CO2 paying £110 and cars in the 51-75g/km of CO2 threshold being charged £130.
LATEST DEVELOPMENTS:
New car tax changes are being introduced within a matter of months, with elderly drivers being urged to act
GETTYAll other rates for cars emitting 76g/km of CO2 and above seeing current levels double for the 2025-2026 financial year, potentially having an enormous impact on drivers.
Anyone buying a large petrol or diesel vehicle which emits more than 255g/km of CO2 could see first year rates double from £2,745 to an enormous £5,490.
