How to get a road tax refund

RIFT Round Up:

• DVLA refunds full unused months only.

• The refund is calculated from the date DVLA receives the information about the vehicle.

• In most cases, the refund is issued automatically after you correctly notify DVLA.

• DVLA currently sends the refund by cheque to the name and address shown on the V5C vehicle log book.

• If you pay vehicle tax by Direct Debit, DVLA cancels the Direct Debit automatically once the vehicle tax is cancelled.

• Vehicle tax doesn't transfer to the next keeper when a vehicle is sold or transferred.

• DVLA says to contact them if your refund cheque hasn't arrived after 8 weeks.

What is a road tax refund?

A road tax refund is a reimbursement for vehicle owners who have overpaid their Vehicle Excise Duty. Basically, it puts cash back in your pocket for any remaining vehicle tax you’ve already paid for but won’t use.

You'll need to reach out to the right people (in this case, the DVLA) and send the paperwork needed to prove your refund is legit. Once approved, the refund is typically issued as a direct payment or as a credit towards your account if you're transferring the tax to a new vehicle. 

Some examples of situations where a road tax refund applies include: 

• Selling your vehicle

• Transferring ownership

• Declaring your vehicle off the road (SORN)

• Scrapping your vehicle

Who is eligible for a road tax refund?

Anyone who has paid road tax for their vehicle is eligible for a refund if they fall under the relevant circumstances (see above). However, they must be the registered owner of the vehicle and have the tax in their name at the time of making the refund request. 

Businesses can also claim refunds under the same conditions as individuals – i.e. the business must be the registered owner of the vehicle at the time of the refund request. 

It’s important to note that road tax refunds are calculated on full months of unused tax. Partial months are not refundable. For example, if a vehicle is sold or declared off-road halfway through a month, the individual or business will not receive a refund for that partial month, but they will receive a refund for any full months of tax remaining. 

For more detailed information, it's always a good idea to check directly with the DVLA. 

How do I get a road tax refund after selling my car?

Tell DVLA that you've sold or transferred the vehicle.

Once DVLA receives the notification, the existing vehicle tax is cancelled. You'll then receive a refund for any full months remaining.

The tax doesn't move across to the buyer.

The new keeper must tax the vehicle themselves.

Do I have to apply separately for the refund?

Usually, no.

For most of the qualifying situations listed by DVLA, the important action is notifying DVLA correctly about what has happened.

DVLA then cancels the vehicle tax and automatically issues any refund due for full unused months.

There are exceptions. A stolen vehicle, for example, has its own notification process, and additional steps can apply if the vehicle has a personalised registration number that you want to keep.

Follow the GOV.UK process that matches your circumstances rather than sending a general refund request.

How is a car refund calculated?

A car tax refund is calculated based on the unused months of the tax period and begins from the date the DVLA gets your information. Therefore, if you apply for a refund at six and a half months, you’ll get five months back (not five and a half). 

It’s important to note that refunds exclude any additional fees or fines, such as late payment penalties, outstanding charges, credit card fees, or any surcharges. The refund only covers the unused portion of your road tax, and any processing fees for issuing the refund may also be applied. 

What isn't included in the refund?

DVLA says you won't receive a refund for:

• credit card fees

• the 5% surcharge applied to some Direct Debit payments

• the 10% surcharge on a single six-month payment

The current GOV.UK guidance doesn't state that a separate processing fee is deducted for issuing a standard refund.

When can you expect the refund?

A road tax refund typically takes around four to six weeks from the date your application is processed. The refund is often paid via cheque, which is sent to the address provided on your application. In some cases, refunds may also be processed directly to the bank account if you’ve set up a direct debit for road tax payments. 

Common reasons for refund delays

One of the most common reasons for car tax refund delays is failing to notify the DVLA as soon as your circumstances have changed. The longer you wait to inform the DVLA, the longer the refund process will take. In some cases, it may not be processed at all. 

Other reasons may include: 

• Failing to inform the DVLA of a change in ownership 

• Errors in personal or vehicle information like a misspelled name or incorrect vehicle registration number 

• Incomplete applications 

• Missing supporting documents 

• Outstanding vehicle fines or penalties 

These tend to be the main culprits, so make sure to give all the right info, with all the necessary paperwork.

What happens if you don’t notify the DVLA?

If you don’t notify the DVLA that you’re no longer using your registered vehicle, you will still be responsible for the tax on it. This means you’ll end up paying for a car which is no longer in use and/or yours.

Not keeping your vehicle records up to date could mean fines, penalties, or legal trouble—because as far as the DVLA’s concerned, it’s still taxed and on the hook for charges.

We highly recommend keeping the DVLA in the loop about changes to your vehicle status to avoid unnecessary costs and ensure compliance with regulations. 

Tips for a smooth road tax refund process

Just a few tips to help make the process as quick and painless as possible. 

✔ Double-check all forms and details before submission

Before submitting your refund claim to the DVLA, make sure you carefully review all forms and details – and we mean carefully. Mistakes or missing information can lead to delays or even rejection of your claim. 

✔ Keep a copy of your V5C and any correspondence with the DVLA

Always keep a copy of your V5C as it contains vital information about your vehicle. Additionally, retain any correspondence you have with the DVLA. Having these records will help you track the progress of your refund and resolve any issues if they arise. 

✔ Apply as soon as you’re eligible to avoid delays

To ensure your refund is processed quickly, it’s important to apply as soon as you are eligible and not a moment later. The DVLA often works on a first-come, first-served basis, so the sooner you apply, the sooner you can expect your refund.

Follow these easy steps and get your car tax refund. No fuss, no faff! Or, check out our mileage tax calculator to see if you're owed tax back on your travel for work.