Car tax refunds explained

A tax refund is not transferable to a new owner so it’s a good idea to try and get a refund immediately as, by law, you must let DVLA know when you no longer own a vehicle.

You also get a tax refund if you SORN your vehicle. A Statutory Off Road Notification (SORN) is, when you take your car ‘off the road’ because you’ve decided to stop insuring and taxing it.

How do I cancel my car tax?

You can tell the DVLA you no longer own a vehicle by confirming the change online. You will be asked if you’re a motor trader. If not, then you confirm you have either:

• Sold your car

• Put it in someone else’s name

• Scrapped it

If you’ve sold the vehicle then you need to make sure the buyer has the green new keeper slip from the log book. You are free to destroy the rest of the old log book. 

Before your new buyer drives away they must tax the vehicle or declare it off the road (or SORN – the acronym stands for Statutory Off Road Notification).

Why do I need to cancel my road tax?

If you’ve a new job away from home, for example, and wish to ‘retire’ your car without selling it, it may be sensible to declare it ‘SORN’. You can still keep your car on a driveway or in a garage but it must not be driven on the road. 

If your vehicle is undriveable (for whatever reason) and you do not wish to sell or get rid of it then the DVLA assumes it’s not being used on the public road – and therefore does not need taxing. 

It’s worth mentioning that the global Coronavirus 2020 Pandemic was a legitimate opportunity to declare a vehicle SORN – should it meet all SORN guidelines – if it was not being used and was genuinely off the public highway.

How do I get a refund if I pay my car tax by direct debit?

As soon as you’ve informed DVLA you’ve sold your car or it’s off the road then your direct debit is cancelled. You will get a cheque refund automatically, sent to your home address, detailed on the old log book. 

However the 5% surcharge on some direct debit payments or the 10% six-month payment is not refundable. 

How do I get a full car tax refund?

You are entitled to a full refund for any full months remaining tax if you:

• Sell your vehicle to someone else or transfer ownership

• Your insurance company writes your vehicle off

• Your vehicle is scrapped at a vehicle scrapyard

• Export your vehicle out of the UK

• Register it as a bona fide tax exempt vehicle

• It is declared SORN and therefore is taken off the road

If you tell DVLA your vehicle has been written off you must supply DVLA with the insurance company’s name and its registered post code. You can put this information in the ‘provide trader details’ section when you apply online.

You will also need to supply the registration number and the 11-digit reference number from the ‘sell, transfer or part-exchange your vehicle to the motor trade’ section of the V5C log book. 

You will be sent an email confirming the details. A letter will also be sent to your home address. You will then receive a cheque tax refund though you must allow up to six weeks for its delivery.

How do I cancel car tax paid by direct debit? 

By contacting DVLA directly. If you cancel your direct debit DVLA will send you a VED cheque refund for any full months left on your car tax. However if you cancel shortly before your next monthly payment due it may still be taken. 

Your full refund will be dated from the time you let DVLA know that:

• You’ve sold or transferred your car to someone else

• Your vehicle has been scrapped at a scrapyard

• It has been stolen

• It has been exported out of the UK

• Your insurance company has written your vehicle off

How long does it take to get a car road tax refund?

DVLA says a full refund can take up to six weeks. Contact DVLA if you’ve not received it in this period.

Car tax changes: What do you need to know?

How do I get in contact with DVLA about my car tax refund?

You can easily contact DVLA online about a range of vehicle and driver enquiries including car tax. 

You can use this service to enquire about personalised registration plates, report an untaxed or abandoned vehicle plus queries about exporting or importing a vehicle.

What if DVLA rejects my tax rebate application?

Your application for a tax refund can be rejected if your application detail does not mirror the log book. These details must match exactly. 

If you change your address then you must also update your V5C log book. This is free to do. If you do not update your log book then DVLA can fine you up to £1,000. You need to give the addresses you’ve lived at during the last three years. 

Be aware that the process is different in Northern Ireland. You can change your Northern Ireland address online if you are resident in Northern Ireland.

What if my DVLA car tax refund cheque is wrong?

Pop the cheque back in the post and make it clear what the mistake is. You need to send it to Refund Section, DVLA, Swansea SA99 1AL.

How do I work out my car tax rate?

The tax rate of your vehicle is based either on its fuel type, CO2 emissions and engine size. In some cases the tax rate will be affected by when the vehicle was registered. 

If your car was registered before 1 March 2001 the tax depends on the engine size only. After this date your vehicle’s tax rate is measured on its fuel type and CO2 emissions. 

You can find a number of useful information details about most vehicles by going online and entering the vehicle’s registration number. You can also check its tax – its current rate and when it expires – details plus MOT and SORN status. 

This portal also supplies details about:

• Log book (the V5C) issue date

• The year the car was built

• Type approval

• Weight

• Engine size

• Fuel type and emissions

If you modify your vehicle and the engine size increases, your tax will change. You will need to change your car’s tax class by filling in a V70 form. 

Are there DVLA tax refund scams?

There are regular online tax scams. The DVLA strongly advises motorists to contact them only via GOV.UK websites and web pages. 

Keep an eye out for potentially misleading third party websites. “These sites,” DVLA advises, “will often offer to help you apply for a driving licence or tax your car but are likely to charge additional fees for services that you could get for free or at a lower cost on GOV.UK.”

Look out for premium numbers and text messages. Remember, the government never sends texts about vehicle tax refunds. 

“Text scams often ask you to follow a link to provide credit card details. Never click on the link and delete the text straight away,” it adds.

• Take sensible precautions on social media about the status of your vehicle

• Be especially wary of any messages that urges you to take action immediately

• Be alert to any website purporting to be a genuine GOV.UK website – especially a website that asks for personal information to be entered

How many DVLA tax refunds are made every year?

The latest figures available (2017) suggest more than five million at a total cost to the government of £1.96 per refund. The Government says its data is subject to change “as the method of calculation is refined”.

What if I take my SORN vehicle back on the road?

Declaring a vehicle SORN can save you a lot of money. But to get the vehicle back on the public road you must insure and tax it. It must have a valid MOT. It is legal to drive a SORN vehicle to a garage for a pre-booked MOT as long as you don’t stop on the way. 

It must also be insured because you are driving it on the public road. As soon as the car has passed its MOT, you must re-tax it. 

If your vehicle is declared SORN the DVLA thinks it’s either unroadworthy, is in storage, undergoing restoration or is simply not being driven. Whatever the circumstances it must not touch public tarmac. 

You do not now have to renew the SORN status of your vehicle – the law was re-jigged in 2013 – but once you re-tax it the SORN status is immediately cancelled.