Car tax is the payment we all make to use our car on the UK roads and is one of the three compulsory elements of owning a car with the MOT and car insurance. However, if you sell or scrap your car you can cancel your car tax and you may even be due to a refund depending on how you have paid for it. Here's a simple guide on how to cancel car tax.
Reasons to cancel car tax
When you contact the DVLA to cancel your car tax, they are going to ask the reason for the cancellation. Depending on your answer, there are different steps that you need to take. Here are some of the most common.
Sold or transferred
If you have sold the vehicle or transferred it to someone else, then it is up to them to start paying car tax for the vehicle. You can contact the DVLA to advise this if you have not already sent off the log book (V5C). If you have already sent off the log book, then you will need to wait for them to receive this before anything else can be done.
Taken off the road (SORN)
If you still own the vehicle but you are taking it off the road and keeping it on private property, then you can use the SORN declaration and stop paying car tax. The SORN or Statutory Off Road Notification can be done by contacting the DVLA with the 11 digit number from your log book and they can register it as SORN immediately.
If you want to do this when the car tax expires, in the following month, then take the 16 digit number from your tax reminder and contact the DVLA. This is a single use number for this purpose only.
Written off
If you have been involved in an accident and the insurance company has decided to write off your vehicle this is the process to follow. For vehicles written off by the insurance company, you will need the details of your insurance company and these are entered into the 'provide trader details' section of the log book. You will also need the registration number and the 11 digit reference from the log book section 9.
Scrapping the car
To scrap a car that is no longer fit for use on the road, you need to go to an authorised treatment facility (ATF) - usually a scrapyard or a breaker's yard. You need to give the log book to the ATF but retain the yellow slip. Then send this slip to the DVLA with details of the ATF that has taken possession of the vehicle.
If you want to scrap the car and keep parts from it, you must let the DVLA know that it is off the road. You can transfer the registration number to another vehicle if you want. Then follow the same process as above for the remains of the car after you have kept the parts you want.
For cars that have been stolen, you need to ring 101 for your local police station to report the theft. They will need the registration, make, model and colour and they will provide you with a crime reference number. This is then passed on to your insurance company when you ring them.
If the vehicle is recovered, then the insurance company may decide to write it off. You would follow the process above for this. They may require that you send them the log book to finish the process so do this if they ask.
Exported outside the UK
If you plan to take the car outside the UK for 12 months or more, you will need to complete the 'notification of permanent export' section of the log book and send to the DVLA. Tell them where to send the car tax refund if there is one. Keep the rest of the log book for your own reference. If you are moving to Northern Ireland, you can just notify of a change of address as normal.
Getting a car tax refund
Once you have followed the correct process to tell the DVLA why you no longer need to pay car tax, you can then see about the refund. If you are paying by Direct Debit, this will be cancelled by the DVLA although you can also do this at the bank once you know the account is settled.
Any refund due will be paid to you by cheque. This will come through the post to your home address. There is no refund due for any credit card fees, the 5% surcharge on direct debit payments or the 10% surcharge for paying in a single 6-month payment.
The amount of refund due will be based on either:
- The first tax payment when you registered the vehicle
- The rate for the second tax payment onwards
What if the refund doesn't arrive?
You will normally receive your refund cheque within 6 weeks of contacting the DVLA. If you haven't received it in this time, you can contact them. It may be that there's no refund due or that the cheque has gone missing in the post.
The main contact number is 0300 790 6802. Lines are open from 8 am until 7 pm weekdays and from 8 am until 2 pm on Saturdays. Calls are charged at the local call rate and if you have inclusive minutes on your contract, there are often free.
If you need to return a cheque that has been made out with the incorrect name or has expired, you can send it to:
Vehicle Customer Services
Transferring your car tax
If you have owned cars for a few years, you have probably transferred a tax disc from one car to another. But with the new disc-free system, this is no longer how it is done. Instead, you cancel the car tax for the old vehicle and set up a new one for your new vehicle.
