Road Tax Refunds Explained
What is a Road Tax Refund?
A car tax refund or road tax refund is money back on any vehicle excise duty (VED) that you have already paid. This is useful if you have paid a year’s tax but you sell your car after less time. You can get a tax refund from the DVLA on full months but not partial months.
You used to be able to sell your car with the remaining tax as part of the deal, it could even be used as a bartering tool for buyers and sellers. Nowadays, you no longer have the old tax disc system and when you sell your car, the DVLA simply refunds you for the tax you are due.
How do I get a DVLA Road Tax Refund?
There are different situations that require a tax refund. You need to work out which category you fall into:
- Selling/Transferring – This one is easy, simply let the DVLA know that you have sold the car and they will send a cheque to the registered owner and address (usually around 6 weeks). It is important to do this as soon as possible to avoid any fines.
- Taking the car off the road – If your car is off the road then you can apply for a Statutory Off Road Notification (SORN) again from the DVLA. They will again send a cheque for the correct amount.
- Modifying a car – Some modifications change a car’s tax band which could increase or decrease the amount of tax you pay. The DVLA should again be informed but if you need a refund, there is an extra Gov.UK form to fill out here…
- Scrapping a car – When scrapping a car, you need to use an approved facility and fill out some straightforward paperwork and inform the DVLA.
- Taking a car out of the UK – If you are taking it out for less than a year then it should still be taxed in the UK. But if you are taking it out for longer then you are eligible for a refund. You do need to send in part of your logbook and follow the steps for taking a vehicle out of the UK.
How do I get Tax on my New Car?
If you are in the market for a new car then you will need to get tax on this vehicle. You cannot transfer tax from your old car or use the leftover tax from the previous owner. You MUST tax any new car you buy yourself. You can tax your vehicle here…
This should only take minutes as long as you have the right details. Make sure you also have the New Keeper Supplement (V5C/2) paperwork when you purchase your new car.
Can I cancel my Insurance for a Refund?
You can usually cancel your insurance policy and get a refund, although, you won’t get the full amount back. Also, expect to pay cancellation fees too! Contact your insurance provider for more details and to find out how to go about this.
Most providers will offer to update your policy to cover the new vehicle to avoid paying cancellation fees. There is a possibility you will be charged for amending the policy though.
When will I receive my DVLA Tax Refund?
You should receive a cheque in the post within 6 weeks. If it still hasn’t come in that time then you will need to contact the DVLA tax enquiries department:
DVLA – 0300 790 6802
Mon to Fri (8 am – 7 pm)
Saturday (8 am – 2 pm)
