Car tax refund
Owning a car comes with its perks. It also comes with the responsibility of adhering to road laws – one of which is Car Tax. This 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 a refund when just a couple of months’ cover has been used. In this scenario, it’s possible to get a pay-back 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?
- How to qualify for a DVLA tax refund
- How much money will I get back from my VED refund?
- What happens after you have cancelled your car tax?
- Can I get a refund on car insurance?
- How can I get car tax for a new car?
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.
In the UK, all registered vehicles that are driven on or kept on a public road qualify for Car Tax. A vehicle kept off-road must also be taxed or have a Statutory Off-Road Notification (SORN).
Car tax is collected and enforced by the Driver and Vehicle Licensing Agency (DVLA). The DVLA is also responsible for issuing refunds. 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.
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:
- You are selling your car or transferring it to a new owner
- The car has been exported from the UK
- The vehicle has been “written off” by your car insurance company
- The car has been scrapped
- The car has been stolen
- The car has been registered as exempt from vehicle tax
- Your car is an off-road vehicle that’s been registered with a Statutory Off-Road Notification (SORN)
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 VED 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. 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
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. The funds usually take a few weeks to arrive. If you haven’t received yours after 6 weeks, then it’s best to contact DVLA directly.
Can I get a refund on car insurance?
If you have paid your insurance fees in advance and you are selling or transferring ownership of your car, then it’s possible to cancel your car insurance policy and get a refund. However, it’s not likely that you will be refunded in full. Cancellation and other deduction fees may apply. It’s best to contact your insurance provider to find out if you qualify for a refund, and if so, how much will be due to you?
A refund from your insurer is only necessary if you will not be replacing the vehicle with a new one. That is, if you are getting a new car, most insurance companies will update your old policy to cover it. This way you can avoid cancellation fees. However, if you would like to shop around for a cheaper insurance package for your new set of wheels, then this option is open to you. Take the opportunity to compare car insurance quotes and see if you could get a better deal elsewhere.
How can I get car tax for a new car?
You will need to pay Car Tax every time you purchase a new/used car or transfer ownership into your name. You cannot transfer the tax from your previous vehicle, and you also can't transfer any tax submitted by the vehicle's former owner.
It’s compulsory for a new or transferred car to be taxed for before driven. As the vehicle’s new owner, you can apply for car tax online (which is the quickest option) or you can apply for Car Tax in person at your nearest post office.
* Make sure you get the New Keeper Supplement (V5C/2) paperwork when you buy your car, you’ll need this information for your vehicle tax forms.