Elderly Drivers May Avoid Car Tax Hikes, While You Could Face A £600 Bill If You Drive With One Of These Number Plates

While older drivers might avoid the upcoming increases in car tax, potentially saving themselves hundreds or even thousands of pounds, experts warn that older vehicles with specific number plates could face a hefty tax bill this spring.

In October, Chancellor Rachel Reeves announced that car tax rates would rise in the upcoming financial year, aligning with inflation. This includes significant hikes in tax rates for the first year of ownership for new vehicles registered on or after 1st April 2025.

The Chancellor supports this move to encourage UK drivers to shift towards zero-emission vehicles, which will remain the most affordable options after April, and discourage the purchase of new petrol and diesel cars.

Drivers with certain conditions or who receive specific benefits are encouraged to check if they qualify for an exemption from car tax. To be eligible, the vehicle must be registered in the driver's or a designated driver's name and used solely for the disabled person's personal needs.

Who Can Claim The Exemption

Drivers can apply for an exemption if they receive the higher-rate mobility component of Disability Living Allowance (DLA), the enhanced-rate mobility component of Personal Independence Payment (PIP), the enhanced-rate mobility component of Adult Disability Payment (ADP), the higher-rate mobility component of Child Disability Payment, the War Pensioners' Mobility Supplement, or the Armed Forces Independence Payment.

It is also worth noting that GOV.UK guidelines stipulate that the exemption can only be applied to a single vehicle per eligible driver. '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 vehicle tax,' according to the UK government's website.

Drivers can claim the exemption when applying for vehicle tax. For first-time claims, applications must be made at a Post Office branch. Additionally, UK residents can receive a 50% discount on their VED payments if they qualify for the PIP or ADP standard rate mobility component.

To claim the exemption, drivers must present a letter from the Department for Work and Pensions confirming their PIP rate and their eligibility dates. Alternatively, an ADP decision letter from Social Security Scotland will also be accepted.

Drivers can claim the exemption by providing a slew of documents, including the V5C vehicle logbook, V10 form (the official application form for vehicle tax exemption), current MOT certificate, which confirms that the vehicle meets road safety and environmental standards, and original goods vehicle testing certificate, if applicable.

Who Else Qualifies?

Drivers who qualify for mobility components of certain benefits may also be eligible for the Motability Scheme. In addition to the inflation-based increases in April, the Labour government will also implement higher first-year tax rates for new cars registered after 1st April 2025.

The least polluting vehicles will experience slight price increases. Owners of new zero-emission cars will pay £10, while those emitting 1-50g/km of CO2 will pay £110, and those emitting 51-75g/km of CO2 will be charged £130.

All other rates for cars emitting 76g/km of CO2 or more will double for the 2025-2026 financial year, which could significantly impact drivers. Anyone purchasing a large petrol or diesel vehicle emitting more than 255g/km of CO2 could face a doubling of the first-year tax rate, increasing from £2,745 to a substantial £5,490.

Older Cars Face Unexpected Tax Shock

While some drivers may avoid the upcoming tax hikes, others could face significant costs, particularly owners of older vehicles. Leasing experts at Cars2Buy warn that models registered between 2001 and 2017 may be hit with a substantial tax increase, with Vehicle Excise Duty (VED) adjustments taking effect in April.

"Cars registered between 2001 and 2017 will continue to be taxed based on their CO2 emissions, with rates ranging from £20 to £600 per year depending on the vehicle's environmental impact," explained Cars2Buy.

Decoding Number Plates

Your car's number plate can help you identify its age. Vehicles registered between March and August typically have plates that directly reflect their year of manufacture. However, vehicles produced between September and February use plates that add 50 to the year of production.

For example, in 2001, '01' and '51' registration plates were introduced, followed by '02' and '52' in 2002, and so on. From 2010, cars registered in the second half of the year received '60' plates, a pattern that continued with '70' plates in 2020.

With the new tax rules applying to cars registered between 2001 and 2017, vehicles with '17' or '67' plates will also face increased rates. According to the RAC, "For cars registered between 1st March 2001 and 31st March 2017, rates are based on CO2 emissions – the lower the emissions, the lower the tax."

Number Plates at Risk of Higher Taxes

To tax a vehicle, you'll need suitable car insurance and a valid MOT (if the vehicle is over three years old, or four years in Northern Ireland). Both are verified electronically when you apply for car tax.

The following number plates could face the £600 tax bill:
01/51, 02/52, 03/53, 04/54, 05/55, 06/56, 07/57, 08/58, 09/59, 10/60, 11/61, 12/62, 13/63, 14/64, 15/65, 16/66, and 17/67.

These changes could have a significant impact on your motoring costs. Check your registration to see if you're affected and prepare accordingly.