Which NHS and health bodies are exempt from vehicle excise duty under Schedule 2, paragraph 7?

The exemption covers health service bodies defined under the National Health Service and Community Care Act 1990, NHS trusts established under the NHS Acts for England, Wales, and Scotland, NHS foundation trusts, Health and Social Services Trusts in Northern Ireland, Local Health Boards in Wales, and the Care Quality Commission.

Do NHS foundation trusts need to pay road tax on their fleet vehicles?

No. NHS foundation trusts qualify for the vehicle excise duty exemption in their own right under Schedule 2, paragraph 7. All vehicles used or kept on a road by an NHS foundation trust are exempt from road tax, though the vehicles must still be properly registered with the DVLA.

Does the vehicle excise duty exemption apply if an NHS trust leases vehicles to a third party?

No. The exemption applies only when the vehicle is being used or kept on a road by the qualifying body itself. If an NHS trust leases vehicles to a non-qualifying third party, that third party cannot benefit from the exemption and must pay vehicle excise duty on those vehicles.

Are Local Health Boards in Wales exempt from vehicle excise duty?

Yes. Local Health Boards established under the National Health Service (Wales) Act 2006 are specifically included in the exemption. Vehicles used or kept on a road by these boards are exempt from vehicle excise duty, which should be reflected in their budgeting and fleet cost reporting.

Vehicle Excise and Registration Act 1994 schedule 2 paragraph 7

NHS and health body vehicle excise duty exemption

Schedule 2, paragraph 7 provides that vehicles used or kept on a road by certain NHS and health-related bodies are exempt from vehicle excise duty (road tax).

Vehicles used or kept on a road by designated NHS and health service bodies are exempt from vehicle excise duty
Qualifying bodies include health service bodies in England, Wales, Scotland, and Northern Ireland, as well as NHS trusts and NHS foundation trusts
Local Health Boards established in Wales also qualify for the exemption
The Care Quality Commission is included as a qualifying body whose vehicles are exempt

Access full legislation.And much more.

By becoming a member, your team gets full access to Tax World research tools and source-backed tax resources.

Become a member