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Car Tax Refunds Explained

Find out more with this guide.

Last updated: 14/12/2023 | Estimated Reading Time: 6 minutes

Car tax permits vehicle owners to drive and park on public roads. It’s typically paid in blocks of 6 or 12 months.  

But because these taxes are paid in advance, it’s not uncommon for an individual to request money back when just a couple of months’ cover has been used. In this scenario, it’s possible to get a refund for any unused months of tax instalments.

In this guide, we’ll discuss how a DVLA tax refund works. We’ll also uncover the steps on how to process a refund and apply for Car Tax on a new vehicle.

In This Guide:

What is a car tax refund?

A car tax refund (sometimes called a road tax refund) refers to money that will be paid back to you on any vehicle excise duty (VED) that you have already paid.

For example, if you have paid for 12 months of vehicle tax in advance, but sell your car after 4 months, then you will qualify for a reclaim of most of the tax. Car tax refunds can only be given for full months, so you won’t be able to receive a refund in two or three weeks.

How to qualify for a DVLA tax refund

To get a refund for any full months remaining tax on your vehicle, you’ll need to meet the qualifying criteria.

On your car tax refund application form, you will have to state one of the following reasons to justify your refund request:

If your reason for claiming a tax refund on your car matches any of the above, then there should be no hassle with approval of your application.

However, it is important to note that there are no other circumstances in which you can cancel your car tax and claim a refund on the remaining period.

How much money will I get back from my Vehicle Tax Refund?

A car tax refund is calculated from the date DVLA gets your information. The amount is determined by how many months you have paid for in advance. It’s important to send your application as soon as you can, as delaying it may result in you paying more car tax than you should, especially if the DVLA receives your application part-way through a month.

You should also expect the following deductions from your refund total:

  • Credit card charges
  • The 5% surcharge to some direct debit payments
  • The 10% surcharge on a single 6-month payment

How do I claim tax back on my car?

To apply for a vehicle tax refund, one would first need to complete a form V14. This form can be found online on the gov.uk website, or it can be collected from your local post office. The exact process you have to follow will depend on the reason you’re applying for a refund, as you’ll need to first declare your vehicle as no longer belonging to you or as no longer eligible for car tax before completing your application.

What happens after you have cancelled your car tax?

Once your application for a car tax refund has been approved and the refund total has been calculated, then DVLA will cancel your vehicle tax for the car in question.

If you pay via direct debit, the debit order will be cancelled immediately. You'll then receive a refund payment into your account for the remaining months left on your car tax. In some circumstances, you may receive a refund cheque in the post.

Road tax refunds usually take a few weeks to arrive. If you haven't received yours after 6 weeks, then it's best to contact DVLA directly.

FAQ's

Will the DVLA automatically refund car tax?

The DVLA will only refund your car tax if you make an application. Even if you declare your car as no longer yours or as written off, your car tax won’t be automatically refunded if you fail to fill out the correct forms. However, after you have submitted your application, your car tax should be automatically refunded into your bank account if approved by the DVLA.

How do I cash a DVLA refund cheque?

If you have received a refund cheque from the DVLA, you can cash it at the bank or sometimes via your mobile banking app. If you’re not sure whether your bank allows cheques to be cashed through your mobile app, get in touch with them for advice.

Do I get a road tax refund if I SORN my car?

You can apply for a road tax refund if you declare your car as SORN. However, simply declaring your car as such does not guarantee you a refund. Make sure you tell the DVLA as soon as your car is SORN to get the right amount refunded to you.

How do I know if my car is taxed?

If you’re not sure if your car is currently taxed, you can check on the gov.uk website. To access the information you need, you should have your car’s reference number and car registration number to hand. You should be able to find both of these in your log book.

Can the DVLA refuse my car tax refund?

Yes, in some circumstances the DVLA may refuse your car tax refund. However, this is usually due to providing them with the wrong information or applying for a refund when you don’t qualify. If your application has been rejected, check to make sure that all your personal information is correct, as even a small discrepancy can lead to a refused application. For example, if you’ve changed your address recently but haven’t updated your driving license and log book, you could not only be rejected for a refund, but may also be fined.

Can a car tax refund be backdated?

No, if you forgot to apply for a car tax refund, you cannot claim for past months later. This is why it’s important to send your application quickly, as car tax refunds are processed and calculated when the DVLA receives an application, not from the date you no longer owned your car. For example, if you qualify for a refund of six months of car tax, but are two months late sending your application, you’ll only be able to receive a refund for four of those months.

 

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