Are you liable for a vehicle tax rebate? –

Lawrence Lawrence

July 24, 2023

Reading time: 2 minutes

Are you liable for a vehicle tax rebate?

Car experts are warning UK drivers to take action after selling their cars, after it was revealed millions of Britons could miss out on car tax money owed to the government.

According to LeaseCar and LeaseElectricCar, once people have sold their cars, they do not claim vehicle tax refunds. Vehicle tax payments can range from £0 for fully electric vehicles to £2,605 per year, depending on vehicle model.

Last year, the best-selling used car was the Ford Fiesta. The 2020 model has vehicle tax costing £155 a year, meaning motorists could miss out on hundreds or even thousands of pounds owed to them in tax refunds. Now more than ever, it’s important to claim the money rightfully owed to you, as the cost of living continues to rise.

Of course, the amount that can be claimed depends on the car sold – age, make, model and for how long. After notifying the DVLA that the car has been sold, drivers should apply for a tax refund as soon as they can to get the maximum cashback possible. Only whole months of tax can be claimed – time is running out.

In 2022, nearly seven million vehicles changed hands in the UK. The Ford Fiesta leads the ranking of the best-selling used car model. With automotive trade and creation restricted due to the pandemic and associated global lockdowns, the used car market has exploded in recent years.

However, due to the increased demand for used cars, the price of used cars has increased. The shortage of new cars during the Covid-19 years meant people were looking to buy from others. In fact, in July 2022 the average sale price of a used car in the UK was up almost 20% on the previous year, to £17,173.

Tim Alcock of LeaseCar says:

Any driver who recently sold their car after paying road tax will be eligible for a refund from the government. If you have paid your road tax for an entire year and you sell the car after a few months, you may receive most of the tax in your bank account.

“It’s important to note that the DVLA tax refund only applies for full months, so it’s best to claim your refund immediately to avoid running out of money. After selling your car, drivers should let the DVLA know as soon as possible to ensure they get as much money as possible.

“Before selling a vehicle, the logbook (V5C) must also be updated to reflect any changes in name, address or modifications to the car. Any incorrect information may prevent motorists from obtaining a tax refund.

“Also, be sure to tell the DVLA that you have sold your car and provide the full name and address of the buyer. Failure to do so may also prevent you from recovering any money.