British motorists are being urged to ensure they are aware of their vehicle tax requirements ahead of new changes next year, even if they currently don’t have to pay.
Industry experts have highlighted how former Chancellor Jeremy Hunt wanted to create a “fair” system of taxation and that all motorists pay their equal share.
This was formally announced in the Autumn Statement in 2022 and outlined that electric vehicles and low emission vehicles would begin paying Vehicle Excise Duty from April 2025.
Andy Wood, from Tax Natives, said: “While the change is a significant shift, many drivers may not be prepared for the extra cost, and it’s essential to check your vehicle’s tax status ahead of time to avoid surprises.”
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Drivers are being urged to check their car tax status
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In the most recent Budget, led by Chancellor Rachel Reeves, the Government announced it would uprate standard Vehicle Excise Duty rates for cars, vans and motorcycles, excluding first year rates for cars, in line with RPI from April 1, 2025.
In addition, the Government will uprate VED rates for heavy goods vehicles in line with RPI, as well as the HGV Levy from April 1, 2025.
Until April next year, electric cars will remain exempt from paying Vehicle Excise Duty, although drivers need to ensure they are still taxing their vehicles.
The DVLA recently posted on social media site X, formerly known as Twitter, stating that drivers must tax their vehicles, even “if you don’t have to pay anything”.
Wood continued, saying: “Even vehicles that are currently exempt will still require owners to make sure they fall under the correct category.
“It’s particularly vital for owners of ‘limited use’ vehicles – those used in agriculture, horticulture, or forestry with restricted road travel distances – to ensure they meet the criteria outlined in the V355/1 DVLA document.
“Failing to adhere to these requirements could lead to losing their tax-exempt status.”
Several other vehicles are exempt from having to pay vehicle tax, including those used by a disabled person if they get the Disability Living Allowance, Personal Independence Payment, Adult Disability Payment, Child Disability Payment War Pensioners’ Mobility Supplement or the Armed Forces Independence Payment.
Historic vehicles are also exempt. Owners of classic cars made before January 1, 1984, do not need to pay. If they don’t know when the vehicle was built, but it was registered before January 8, 2984, they do not need to pay vehicle tax.
Drivers must apply for this exemption to stop paying vehicle tax. If they fail to do this, they can be fined up to £2,500 and get three penalty points for using a vehicle in a dangerous condition.
Vehicles used for agriculture, horticulture and forestry, including tractors, agricultural engines, light agricultural vehicles used off-road and “limited use” vehicles used for short journeys (no more than 1.5km) are also exempt.
Drivers can declare their vehicles SORN (Statutory Off Road Notification) if they no longer want to pay vehicle tax, although they will no longer be able to use their vehicle.
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While this may not be an option for many people, motorists are able to get a refund for any remaining vehicle tax they may owe.
