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Road tax refunds – How much can you claim? - The PAYE People

September 28, 2021by The PAYE People

With the new year around the corner, people are starting to consider their tax return and whether or not they’ll be able to claim a tax refund. With the new laws and regulations that were introduced in April 2018, it’s important to be mindful of what you can and can’t claim on your tax. One particular item of interest is the vehicle excise duty (commonly known as road tax). The question is, which rules apply if you’ve already paid your road tax but now want to claim road tax refunds? Things are simpler than you might think.

Road tax is the tax you pay for owning and using a vehicle in the UK. The more you use your vehicle on UK roads and depending on which type it is, the more you’ll pay in road tax. But before you start looking for an estate agent to sell up and move elsewhere, there are some tax refunds you can take advantage of. You can apply for a refund online at the DVLA website by submitting a claim form.

What are road tax refunds?

It’s not just you. Many people are confused about what road tax refunds are and how much they can claim.

Road tax refunds is the money paid by the Treasury or HMRC (Her Majesty’s Revenue and Customs), to people who pay their road taxes. These payments are made when the owner of the car either surrenders the vehicle back to the relevant manufacturer or when it is scrapped. You can also qualify for road tax refunds if you:

  • Sold your vehicle to someone else
  • Your car got stolen
  • Exported outside the UK
  • Or you registered as road tax exempt

Another common instance where you can claim a road tax is when you declare your vehicle “SORN”. SORN stands for Statutory Off Road Notification which involves notifying the government that you won’t be using your car on public roads anymore. For example, if you are moving out of the country and going to stay away for a while, you “SORN” it. The payment is often made in one single sum, but it may be made in several instalments.

A motorway at night with a selection of cars, driving through the rain.

Why would I need to cancel my road tax?

Busy roads, traffic jams, accidents…the list of reasons why it can be so difficult to get around by car is rather extensive. If you’re sick of the stresses of owning your own vehicle, you needn’t worry. You can cancel your road tax and get a refund for the remaining months. If you are feeling rather uncertain about your road tax refund, don’t be. All you need to do is fill out the form and send it to the DVLA (Driver and Vehicle Licensing Agency) with all your information accurately presented.

The real outcome for you is that you can pocket anything up to £120 or more if you are entitled to a refund, which is the case for many motorists. Early in 2008, the DVLA introduced a brand new way to take care of your tax refund if you are due one, which is fantastic for motorists who do not need to worry about whether they are eligible or not.

How can you calculate your road tax refunds?

Road tax refunds go back to 1930 when it was first introduced to pay for the construction of roads. Today, road tax is collected through the vehicle excise duty (VED) and the purpose is to subsidise fuel duty. It’s based on the engine size of your vehicle, fuel type, and CO2 emissions. In some instances, your tax rate will depend on when your vehicle was registered.

For cars registered before March 1st 2001, the tax you pay is solely dependent on the size of the engine. Those registered after this date pay taxes worked out on fuel type and CO2 emissions. What you want to do is to know the registration number of your vehicle, the logbook date of issue, the year your vehicle was built, weight, engine size, and emissions and type of fuel.

Any modifications on your vehicle that would change the engine size will cause your taxes to change as well. At the end of the day, the DVLA (Drivers and Vehicle Licensing Agency) will refund any taxpayers a proportion of the fuel duty which they contributed.

Heavy traffic moving quickly across the M6 motorway.

How do I claim road tax refunds if I paid using direct debit?

The last thing you want is to find out that you’re not due a tax refund because you paid it back using direct debit. Fortunately, if you paid your road tax using direct debit, you can still claim road tax refunds. The DVLA has made it easy and quick to reach them for inquiries about any taxes they deal with. You can quickly and easily inquire about vehicles and drivers and so claiming your road tax refund won’t be a hassle.

You only need to contact the DVLA directly by presenting your request and they’ll send a cheque to your preferred destination. The amount will be for the months left on your car tax. The DVLA says that you get your road tax refunds within six weeks. If your wait goes beyond this period, reach out to them through their contact information on their official website.

What if my road tax claim is rejected?

The reason some road tax claims are rejected is providing information that does not match what is present in the government records. You must give logbook information that matches what the DVLA has.

“I changed my address, what do I do?” Well, you need to update any permanent location move you make in your V5C logbook. It’s easy and free to do and so shouldn’t be a future obstacle to your claim. You should be aware, however, that if you fail to update your logbook, you may end up paying a fine of up to £1000.

For those who live in Northern Ireland, the process is different. You can update your location online if you reside there.

Though uncommon, you might realise the cheque you got has a mistake on it. Perhaps it has the wrong name or the amount isn’t what you were expecting, or you just got someone else’s cheque. The solution is to return it back to the DVLA stating the mistake you have observed. Wait for another four weeks to get the cheque back.

A motorway in Milton Keynes showcasing heavy traffic driving through.

Will I be able to take my SORN vehicle back to the roads?

When you declare your vehicle SORN, you won’t be paying road taxes as long as it’s not back on the roads. The DVLA assumes that it’s unroadworthy, it’s in storage, or being restored. Therefore, it should never touch public roads as long as the SORN is active. But you can return it on the roads whenever you are comfortable and ready to retax it. If you want to take a SORN vehicle to the garage, you have to prebook MOT and drive it there without stopping along the way.

Your car must be insured when it starts to use the public roads after the MOT expires. When you retax your vehicle, the SORN automatically cancels.

To summarise:

It’s important to understand your entitlement to a refund in order to make the most of your money. If you’ve overpaid road tax, or for some reason, you no longer own your vehicle or stopped using your vehicle, the government will refund the difference. If you’ve not visited the DVLA website before, you’ll need to do it to find out how much you can claim, your entitlement to refunds, and to give details about who will be claiming the refunds.

Talk to The PAYE People today

If you travel to work VIA car and perhaps have a uniform that you have to wear. You may be eligible to claim a tax return for up to four years. The same applies to your travel expenses too if you are constantly travelling to work or perhaps need accommodation for your role. 

The easiest way to get back all the tax your owed is to get in touch with our expert team here at The PAYE People. With an in-depth knowledge of HMRC’s rules, we can give you a clear sense of exactly what you’re eligible to claim. Not only that, but we can take over the claims process for you. We’ll help you gather the necessary evidence, fill out all the forms properly.

We offer free consultations, so if you think you may be owed a tax rebate, get in touch today. We can discuss the specifics of your situation and help you understand if you’re owed money. If we think you are, we can take over the claim on a no-win, no-fee basis. If you don’t get a refund from HMRC, you won’t owe us a penny. Get in touch with us today to start your claim or drop us an email and one of our experts will get back to you.


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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