Car tax, also commonly known as road tax, is not at the top of the list of things people want to spend their money on. Yet, it is an essential component of car ownership. Without it, you’re not legally allowed to drive on public roads.
Due to its importance, car owners will often pay contributions to their car tax in blocks of six or twelve months. However, what happens to the remaining tax if someone only requires a portion of the coverage they paid for?
That’s when a car tax refund comes into play.
Along with describing what it is, this article will detail how to claim road tax back, how long it takes to process, and more.
What’s a car tax refund?
In general, a car tax refund allows you to reclaim back some of the money previously spent on car tax coverage. For instance, if you were to scrap your car and still had four months of tax coverage left on it, you would be eligible for a refund on that remaining amount.
Before 2014, applying for payment on unused tax revolved around filling in a tax disc refund form and returning this with the disc itself. Since the refund on tax disc policy was phased out, the Driver and Vehicle Licensing Agency (DVLA) has moved to an electronic system for car tax.
A guide on how to claim back car tax
When you want to cancel car tax, this can begin by visiting the “Vehicle Tax Refund” page on the DVLA website. From here, you can determine the right option for you, and also which contact method to use. The three contact choices are:
- Phone
- Email/contact form
- Post
Surprisingly enough, there is no dedicated portal to cancel car tax online. Yet the lack of a DVLA car tax refund online platform shouldn’t be an issue, especially if you are seeking a tax refund after scrapping your vehicle. The reason for this is simple: it’s done automatically.
Assuming an official Certificate of Destruction is issued when the car is scrapped, the road tax refund will be triggered instantly. This is because the DVLA is the one that issues the COD, so they will be aware the vehicle is already off the road – and the tax is no longer necessary as a result.
When the DVLA knows about the change in your road tax situation, they will automatically cancel any future Direct Debit payments that might be arranged. In addition, they will send out a cheque for the unused tax left – if any. Note: the cheque will be sent to the address noted in the vehicle logbook (V5C), and also made payable to the name listed in the book.
How long for a car tax refund to process?
When reclaiming road tax, don’t expect an instant refund. While payments out will cease immediately, you could be waiting around for the refund cheque to arrive in the post. Once the application is complete, the DVLA can take up to six weeks to finish the tax refund process.
If those six weeks have surpassed and the cheque still hasn’t arrived, it’s up to you to get in touch with the DVLA. There are various options available, as listed on the “Contact DVLA” page.
How much do you get from a road tax refund?
As you would expect, there is no definite answer to the question. Car owners all pay different rates of road tax, and the total amount depends on the amount of tax left – another point that fluctuates on a case-by-case basis.
This is where a car tax refund calculator provided by the DVLA would come in handy. There’s just one problem: it doesn’t exist. There are unofficial ones available, of course, but there’s no guarantee they will deliver an accurate figure for your refund of road tax.
Thankfully, working out how much you’re owed is a straightforward task.
First of all, find out how much you are paying on road tax per month. Now it’s a case of working out how many months were left on your tax. This is the part that can cause people to become a little confused, as only full months are accepted.
What does this mean, exactly? Well, say you have paid your road tax until the end of June. Now, if you decide to scrap your car on April 20th, you are eligible for a two-month refund that covers May and June. The remaining time left in April, however, doesn’t come into the equation – not even as a partial payment.
What are the other methods to claim car tax back?
Aside from scrapping your car, there are other choices available when acquiring a vehicle tax refund. This is when the car is:
- Sold or transferred to another person
- Legally listed as off the road with a Statutory Off Road Notification (SORN)
- Written off by your car insurance provider
- Stolen
- Exported outside the UK
- Listed as exempt from road tax
Other than those listed above, there is no alternative option to cancel car tax.
Based on the way it works for scrapping, you might be thinking, ‘do car tax rebates happen automatically’ for these available methods? In some cases it does, in others, you will have to directly contact the DVLA.
For example, if you apply for a SORN on the vehicle, nothing more is needed regarding receiving a tax refund. It’s done automatically, and the process follows the same route as when a car is scrapped.