When Does a Car Become Tax Exempt? (Car Tax Guide)
Cars in the UK need to pay an annual Vehicle Exercise Duty (VED), more commonly known as road tax, in order to legally circulate on the public road. The value of the fee depends on the car’s age, fuel type, tailpipe CO2 emissions, and engine capacity, with older or more polluting models typically being more heavily taxed. However, several cars can actually become tax exempt.
If you drive a classic car or any of the special vehicles that meet the criteria, this could save you a lot of money in tax costs. This article outlines the criteria that make a car tax exempt in the UK, as well as the steps you need to take to apply for the road tax exemption.
Road Tax Exemption for Historic Vehicles
A few years ago, the UK Government implemented a 40-year rolling tax exemption for historic vehicles. Essentially, what that means is that you can register vehicles that are over 40 years old as tax-exempt. More specifically, for each financial year starting on April 1st, vehicles manufactured at least 40 years before January 1st of the same year are eligible for this.
For example, for the 2025 financial year, starting on April 1st, 2025, you won’t have to pay the VED if your car’s manufacturing date is earlier than January 1st, 1985 (or if its first registration date is earlier than January 8th, 1985).
Cars registered as historic enjoy a few extra benefits in addition to not having to pay road tax. For starters, they are also MOT-exempt, provided they haven’t been extensively modified (things like new chassis or different engines from stock). They are also London ULEZ compliant. That means if you want to use your 1960s Jaguar E-Type as your daily driver in the city centre – you can! We can’t think of a much better way to “stick it to the man” …
How To Apply for a Tax Exemption on Your Car?
Just because your vehicle is over 40 years of age doesn’t mean you can simply stop paying your VED. There’s a fine of up to £80 for driving a car without submitting your tax – even if you don’t actually have to pay anything.
You will need to put your vehicle in the historic tax class with the DVLA and apply for the exemption. This can be done at a post office that deals with vehicle tax. Here’s all you need to bring:
- your V5C log book. If you don’t have one, you’ll need to fill out an application with a V62 form and pay a £25 fee.
- your V11 tax reminder, if you received it,
- the current MOT certificate. If your car is already MOT-exempt, you’ll need a V112 form instead.
- In Northern Ireland, you’ll also need to bring your insurance certificate.
That’s it! Now, you don’t have to pay VED on your classic car. You will still need to file your road tax every year, although it’s going to cost you a total of £0. However, even if you don’t have to bring your vehicle in for its annual MOT anymore, you still need to ensure it remains roadworthy. The fine for driving a “dangerous” vehicle on the public road can go up to £2,500, so don’t skimp on basic maintenance.
If you’re going to keep your vehicle away from the road for a while for major repairs, you can apply for a SORN (Statutory Off Road Notification) instead. When you are ready to part ways with your classic – whether it’s pristine, still a work-in-progress, or even a non-runner – one of our trusted car buyers will be happy to offer you a deal.
Other Tax Exempt Vehicles
It’s not just vintage vehicles that can apply to become tax exempt – several other specific motorised machines are also eligible for the benefit. Here are a few examples:
- Vehicles driven by or used to transport disabled people, as well as mobility vehicles and powered wheelchairs.
- Agricultural (and similar) equipment, such as tractors. Mowing vehicles also apply.
- There’s no road tax on Electric cars. They enjoy a tax benefit and are VED exempt – at least until 2025.
- SORN (Statutory Off Road Notification), vehicles which are registered as exclusively for off-road use, are also exempt.
Check the DVLA website for the complete list, as well as additional information.
Conclusion: When Does a Car Become Tax Exempt?
In summary, vehicles in the UK can become road tax exempt the year they reach 40 years of age. This is not an automatic process – you need to file the necessary paperwork to classify it as a historic vehicle and apply for a VED exemption. Even if it’s free, you still need to submit your taxes every year. There are several other exceptions, so make sure you qualify.
So, if you own a piece of automotive history (or are interested in doing so), you can save a considerable amount of money by applying for road tax exemption. Hopefully, the extra funds in your pocket will help you keep your classic in tip-top condition – and still on the road.
