Taxed vehicles, cars and lorries at rush hour on road

Do you need to pay car tax?

Our in-depth guide to car tax tells you everything you need to know. Read on for more!


Car tax, otherwise named Vehicle Excise Duty (VED), road tax or vehicle tax, is something we need to pay to drive and park our cars on roads in the UK. The amount you need to pay out depends on the vehicle and how much carbon dioxide (CO2) it releases.

However, if you have a disability, you may not have to pay VED. 

If you’re a Motability Scheme customer, you’ll be exempt from car tax as you’ll already be receiving a qualifying mobility allowance.

The Scheme will arrange for your vehicle to be taxed automatically throughout your lease. However, you can choose to pay tax on your lease car if you want to use your VED exemption on another vehicle.

Eligibility for vehicle excise duty exemption

As we’ve said, the Motability Scheme will take care of your lease vehicle’s tax, but we think it’s worth explaining the eligibility criteria for VED exemption.

If you’re disabled and need a car taxing, then you’ll qualify for disability road tax exemption if you receive one of the following mobility allowances:

  • Enhanced Rate of the Mobility Component of Personal Independence Payment
  • Higher Rate Mobility Component of the Disability Living Allowance
  • War Pensioners’ Mobility Supplement
  • Armed Forces Independence Payment.

The car in question should be registered in your name or your nominated driver’s name. But nominated drivers are not allowed to drive the vehicle for personal use. The car must only be driven for your needs.

It’s also important to note, as we’ve already alluded to, that you can only have one vehicle tax exemption at any time. So, if you already have another car that you’ve chosen to make exempt, you’ll pay tax on your Motability Scheme car.

How to claim vehicle excise duty exemption for the first time

Although the Scheme will arrange for your car to be taxed automatically, if you do need to claim VED in the future here’s how it works.

You can claim for the disability car tax exemption when you’re applying for vehicle tax. If you’re claiming for the first time or change your car, you should apply at a Post Office that offers car tax services. After this, you can submit an application online.

Entitlement certificate

To get your car tax exemption, you will need a ‘Certificate of Entitlement’ for your mobility allowance from your benefit payment agency (this is the award letter stating which allowance you receive and the length of time it has been awarded for).

If your car is new, which it will be on the Scheme, take your ‘Certificate of Entitlement’ to the dealership when you order the car to receive your VED exemption.

Eligibility for vehicle excise duty reduction

If you receive Personal Independence Payment standard rate mobility component, you won’t qualify for full VED exemption, but you can get a 50 per cent reduction. The car should be registered in your name or your nominated driver’s name. And, as with the total exemption, designated drivers are not permitted to drive the car for personal use – it must be driven for your needs only.

How to claim for vehicle excise duty reduction

The only way to first get your disability road tax reduction is by sending the correct paperwork to DVLA, Swansea, SA99 1BF.

You must send the following documents:

  • A letter from the Department for Work and Pensions (DWP) that shows your Personal Independence Payment rate, the dates you receive it, your address and of course, your name
  • Vehicle Registration Certificate (V5c log book)
  • Application form for vehicle tax (V10)
  • A cheque or payable order (made out to “DVLA, Swansea”) for 50 per cent of the vehicle’s full rate of car tax
  • An original MOT certificate (if your car requires one).

Worried about your vehicle tax?

Remember, the Motability Scheme offers a worry free package – all customers need to add is fuel. The Scheme will arrange for your car to be taxed automatically every year throughout the lease unless you decide to pay tax privately.

However, if you have any concerns, you can always check your car tax details at the gov.uk website. Just click on “Check now” and enter your vehicle’s make and its registration number. Keep in mind that the online record will only be updated with new taxation details around seven days before your current tax is due to elapse. Alternatively, you can telephone the DVLA on 0300 790 6802.

If you’re a Scheme customer and you receive a Vehicle Registration Document (V5c) or Vehicle Licence Application (V11) from the DVLA, call the Customer Services team on 0300 456 4566 as soon as possible, as this suggests that the vehicle hasn’t been taxed correctly.

Car Search

The Motability Scheme enables you to swap all or part of your mobility allowance to lease a brand-new car, Wheelchair Accessible Vehicle, scooter or powered wheelchair.

If you’re considering signing up to the Scheme, or you’re changing your Scheme vehicle, explore our selection of cars via our car search tool

If you’d like to know more about the Scheme, request a free information pack and we’ll send you all the information that you need.

Get a free information pack


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