Motor vehicles in the UK, including cars and vans, are required by law to pay road tax to the government to help fund essential road maintenance. Officially called Vehicle Excise Duty, the tax goes directly into central government coffers to be used for general highways maintenance and one-off projects that benefit all road users.
However, some vehicles can be exempt from paying, but only under a set of specific circumstances. To help motorists understand how the system works, we’re taking a look at which cars are road tax exempt and why.
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How much is road tax?
The price varies depending on several factors, with the vehicle’s age and how much pollution it causes to the environment being the two primary considerations. Some vehicles classed as high polluters are charged several hundred pounds annually, while others, including electric vehicles, are exempt.
The differences in price are in place to discourage ownership of vehicles that can cause pollution, and are aimed at persuading motorists to buy more eco-friendly smaller cars, EVs and hybrids. However, if you own a classic car, it may come as a surprise that you’re not required to pay road tax in certain circumstances.
What age is a car tax exempt?
By law, cars that are more than 40 years old are legally exempt from paying. Although you may consider your car to be a classic if it’s 30 years old, for example, by law you’re still required to pay VED. Those registered before 1st March 2001 are taxed on engine size.
In 2001, the law changed to introduce the emissions-based road tax, so all cars registered before this date had their rate “frozen”. Then, once they reach 40 years old, British classic cars are no longer subject to road tax at all. If your historic vehicle is used commercially for business purposes, or for hire as part of a taxi fleet, you’re still liable to pay VED.
The law is slightly different for cars not registered in the UK, such as temporary imports. In some circumstances, you can use a car with foreign number plates without taxing or registering it in Britain if you’re here temporarily as a visitor and don’t plan to stay, or if your car is taxed and registered in its home country. Similarly, if you’re using the vehicle for only six months or less in one year, comprising one single visit or a number of short visits, you’re also exempt from paying road tax.
Benefits of driving vintage vehicles
As well as saving money through car tax exemptions for classic cars, there are other financial advantages if you drive a car that’s at least 40 years old. If your vehicle hasn’t been subject to any significant changes impacting the manufacturer’s original design, you will also be exempt from needing an MOT.
However, it’s still mandatory that the car must be maintained in a roadworthy and safe condition, so regular preventative maintenance is vital to ensure it continues to meet the legal requirements for driving on public roads.
Classic car insurance, also known as heritage or vintage car insurance, is also cheaper in general, as insurers assume these vehicles are driven less often and at slower speeds. There’s also an assumption that owners take better care of them due to their status.
As the owner of an old classic car, you may also be able to borrow money by using it as collateral through vintage cars logbook loans. This is a way of releasing equity in your prestige motor while continuing to drive it until the loan is repaid in full.
Most popular vintage cars in UK
Currently, there are around 10,000 classic vehicles aged 40 years or older on Britain’s roads that benefit from tax exemption status. The most common includes the BMW 3 Series (E30), a classic and popular car from 1982, with an estimated 4,000 still being driven.
The Ford Sierra, launched in 1982, first reached vintage car status in 2022 and there are believed to be around 2,500 of these medium-sized family cars on the roads today.
Other popular cars registered as classics include the 1982-1985 Porsche 944 sports car, with 2,200 still being driven.
How do I get vehicle tax exemption?
You need to apply for exemption at a Post Office that deals with car tax. Visit the PO in person, taking with you the logbook, a vehicle tax reminder letter and evidence that your car is exempt from having an MOT.
Complete a V10 tax request form to have the vehicle’s class changed to “Historic” from “Private Light Goods” in Section 7 of your V5 logbook document. Wait for confirmation that DVLA has approved the change before driving without road tax, or you could be breaking the law. This could take a few weeks.
If your application is approved, your vehicle will be added to the UK Historic Vehicle Register and you will receive an updated logbook reflecting the change of status, including the historic tax class details.
Penalties for driving without tax
If you don’t apply for tax exemption, or drive on public roads before DVLA has changed your car’s status, you could be stopped by the police for driving without road tax. Your car is likely to be impounded, incurring a fee to get it back, and you will also receive an £80 financial penalty. If you fail to pay the fine, you could be taken to court and prosecuted, with a further fine of up to £1,000 for non-payment.
The DVLA carries out computer checks monthly on all UK registered vehicles and if yours flags up as being eligible to pay tax, but is untaxed, you will receive a letter notifying you of the fine, unless your car is declared SORN, which means you have sent a Statutory Off-Road Notification to DVLA to confirm it isn’t being driven at present.
