Ready to read about road tax refunds? Probably not, but this blog is your no-faff guide on how to get a road tax refund. Settle in for a quick 7-minute read—we’ll keep it simple and painless!

Road tax, officially known as Vehicle Excise Duty (VED), is a mandatory charge that vehicle owners in the UK must pay to use their vehicles on public roads. But there are instances where you may be eligible for a refund – and it’s worth knowing about. Claiming a refund can offer a decent amount of cash back by reclaiming tax back you haven't used, so you aren’t paying for a service you no longer need. 

Continue reading if you want to find out when and how you can claim a road tax refund.

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. 

Step-by-step guide: how to get a road tax refund

It’s actually pretty simple. To get a car tax refund, follow these steps. 

Step one

First, let the DVLA know why you want to cancel your road tax – e.g. have you sold your vehicle/taken it off the road etc. 

Step two

Once you’ve notified the DVLA, you’re ready to apply for a refund. You can do this either online or via post, but you’ll need your V5C, your vehicle registration number, and the date you sold, scrapped, or exported the car. Depending on which option you choose, you may also find that other information is required. For example, if you’re taking your car off the road, you’ll have to declare a SORN. 

Step three

Once you’ve cancelled your road tax following the correct process, the DVLA will process it and confirm whether you are eligible for a refund. If your application is successful, you’ll receive a confirmation letter or email. 

As for processing time, online applications are generally processed quicker, often within three to five working days. Postal applications may take longer, generally four to six weeks, due to the additional handling time. 

How is the 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. 

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.