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How to claim your car tax back - Our quick and easy guide - The PAYE People

September 18, 2021by The PAYE People

Can you claim your car tax back? If yes, what does the process look like? So many people like you have sent us questions about car taxes including this one and that’s the motivation behind this post. To help sort out the car tax conundrum, we have written a simple guide on how to claim your car tax back. You claim this money if you no longer own your vehicle for some reason or you have taken it off the road using SORN (Statutory Off Road Notification), or registered it to be tax-exempt. Here are ways you qualify for a car tax refund:

  • If you’ve transferred or sold your car to someone else
  • Taken the car off the road through SORN
  • Your insurance company has written it off
  • Your car has been stolen
  • You’ve exported your car out of the UK
  • It has been scrapped at a car scrapyard
  • Registered for it to be exempted from car tax


Regardless of how you lose the ownership of your car, when your vehicle ceases to be yours, the new owner cannot continue using your road tax; they have to retax the vehicle as soon as they get it. It then becomes your responsibility to inform the DVLA (Driver and Vehicle Licensing Agent) of the transfer through their website. Otherwise, you get fined £1,000 as the original owner of the vehicle.

What is a car tax?

Car tax is a type of annual “vehicle excise duty” levied in the United Kingdom for vehicles used on public roads. It is intended to support the costs incurred when cars are in use. If you have a diesel car that does not meet the RDE2 standards, you pay a higher rate than RDE2 compliant vehicles. That’s a car that emits more than 0.080g/km of nitrogen oxide (NOx). That’s why those driving diesel engines will have to pay these higher car rates.


How to claim your car tax back

It’s very simple, all you need to do is complete the form in the back of your car tax disc to serve as evidence that you no longer own the car. You’ll then need to take this form to your nearest driver and vehicle licensing agency for verification. Make sure they sign and stamp it and you’re all set to claiming your money back.


How to claim your car tax back without doing a ton of paperwork

Learning how to claim your car tax back can seem like a daunting task. But things have been streamlined these days plus you can easily get help from tax reimbursement professionals like the PAYE People. You don’t need to go through confusing processes and a lot of paperwork when there is someone to help. Your car tax claims can be submitted to the relevant government body within a few minutes.

Of course, it’s important that you have details for your car and understand the simple details that you need to get your car tax back. Some people find the process overwhelming and so may require some help. If you are in the same shoe, there are service providers you can get help from. Reach out to us at PAYE people to get the help you need.


How much car tax refund could you claim back?

The actual amount of tax you could claim back depends a lot on individual circumstances. Of course, you can’t claim any tax within a year of purchasing a new vehicle. Normal timing is the first year after purchase, but there are some other circumstances that can change this as well. If you buy a used car from a dealer, for example, you could file as soon as the first one or two years from purchase.

The more efficient a car is, the more you’ll be able to claim back on your tax. You can calculate your return by taking a look at the government website and entering your engine size and your model of car – all this information is on your number plate. Calculate your return by taking a look at the government website and enter your engine size and your model of car – all this information is on your number plate.


What does the refund process look like?

The car tax refund process is quite straightforward. Firstly, you need to go to the DVLA website. Once on the DVLA website, go to the “Vehicle tax” section. Then you will see a box that asks for your vehicle registration number. Fill that in. The next box asks for your postcode. Once you have put in your postcode, you will be given a prompt to check if your “market value” is lower than the rate you are paying. Finally, there is a prompt that asks you to confirm the data you’ve provided then submit it.

When DVLA receives your message that the car no longer belongs to you, they cancel the funding automatically. You get full months of whatever period you won’t be using your car.

For those using debit card to pay car taxes, the cancellation happens automatically. Alternatively, the DVLA can send a cheque to you using the name and address that you availed on the V5C registration document.

You get a reimbursement calculated from the time you confirm to the DVLA that you are no longer the owner of the vehicle. Because of this, we advise that you should report the cancellation as soon as possible. Doing this helps you to avoid losing on reimbursements you’d get for the lost months.


Situations where you won’t get your tax claims

If you paid your car tax using a credit card you won’t be refunded that money. Same goes if you paid a Direct Debit surcharge during the application or paid the 10% surcharge for the one-off six-month road tax payment. For a vehicle that is 40 or more years or a car that is fully electric priced under £40,000, there’s no paying road tax and so you won’t qualify for tax claims.


When will I get my refunds?

Once you have submitted your car tax claims, it should take about six weeks to get the cheque refunds at your address. On rare occasions, it may take longer. When it does, you should reach out to the DVLA to inquire of the progress of the reimbursements. The contact line is 0300 790 6802 from Monday to Saturday during working hours.

Patience is key when calling DVLA because there are hundreds, if not thousands, of inquiries at any given time. It may take a few weeks before they process your application and more time before the money gets to you.

If your cheque comes and you discover it’s in the wrong name, return it with the reason attached. Make sure you state the right name. You should get your replacement cheque after four weeks.


You don’t have to be a lawyer or accountant to claim your car tax back

We all want to save money wherever we can. And that’s true whether we’re talking about our day-to-day spending or spending on something big. When an opportunity to claim your car taxes arises, taking advantage of it the soonest possible is a great idea. You can claim back your taxes through the laid processes; it’s not as hard as you might think. You don’t have to be a lawyer or an accountant to claim your car tax back.

The PAYE People

The PAYE People help PAYE workers all over the UK claim money they’re owed in tax rebates.
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