The DVLA Tax Loophole: Vehicle tax is No Longer Transferable

Did you know that vehicle tax is no longer transferable?

The new rules, introduced by the DVLA on October 1 2014, have resulted in a considerable increase in clampings – up from 5000 a month to almost 8000 (figures obtained by Guardian Money). However reports indicate that motorists are still confused about tax when buying and selling used cars.

Motorists, who are not aware of the new rules, are having their cars towed away and being charged fines of as much as £800.

The DVLA claims that it sends new owners a warning letter before clamping or towing their car away.

The considerations when buying a vehicle

The DVLA have provided the advice below:

When you buy a vehicle, the vehicle tax will no longer be transferred with the vehicle. You will need to get new vehicle tax before you can use the vehicle.

You can tax the vehicle using either the:

• 11 digit reference number from your log book (V5C) – if the vehicle is registered in your name
• 12 digit reference number on your New Keeper Supplement (V5C/2) if you’ve just bought the vehicle or the vehicle is not registered in your name

You can tax online or by using our automated phone service – 24 hours a day, 7 days a week on 0300 123 4321.

Alternatively, you may wish to visit a Post Office® branch.

DVLA are unable to check the vehicle insurance details for new keepers in Northern Ireland online or by phone. If you’re a Northern Ireland new keeper, you will need to tax at a Post Office® branch that deals with vehicle tax.

It is a legal requirement for all UK drivers to have motor insurance in place before using a vehicle on a public road.

What happens to your road tax when you sell your car

Under the new rules, any remaining road tax will not transfer to the new owner with the vehicle. The seller will receive a road tax refund on any tax remaining on the vehicle, while the buyer has to pay to re-tax the car.

The tax refund on a sold car will be sent automatically when the DVLA receives notification that the car has been sold, scrapped, exported or taken off the road with a Statutory Off Road Notification (SORN).

When selling your vehicle, you are expected to inform the DVLA of any change of ownership straight away or face a £1,000 fine. If they do not advise the DVLA – you could also still be liable for speeding or parking fines incurred by the new owner.

To find out whether or not a car is taxed, click here. You will need the make and model of the car and the registration number.

The DVLA have provided advice below:

From 1 October, vehicle tax is not transferable so you won’t be able to include any remaining tax when you sell a vehicle. If you sell a vehicle after 1 October and you have notified DVLA, you will automatically get a refund for any full remaining months left on the vehicle tax. The refund will be sent to the keepers details on DVLA records so you need to make sure that these are correct.

Vehicle tax refunds

You will no longer need to make a separate application for a refund of vehicle tax. An automatic refund will be issued for any full months remaining vehicle tax when a notification is received from the person named on DVLAvehicle register that the:

• vehicle has been sold or transferred
• vehicle has been scrapped at an Authorised Treatment Facility
• vehicle has been exported
• vehicle has been removed from the road and the person on the vehicle register has made a Statutory Off Road Notification (SORN)
• tax class of the vehicle has changed to an exempt duty tax class

If you bought vehicle tax for six-months, you paid an additional surcharge. This surcharge is not refundable.

The DVLA Tax Loophole and Refunds

The issue of vehicle tax refunds is frustrating buyers and sellers – as it appears that the Government may not have thought things through.

When ownership of a vehicle is transferred, the seller or previous owner receives a refund on any outstanding road tax, however that refund is calculated from the beginning of the following month. The new owner has to tax the car from the beginning of the current month.

This means that the Government effectively collects additional tax – from both the seller and the buyer.

Expert Legal Advice on Road Traffic Offences

If you are facing a road traffic prosecution, the most important thing you can do is to get early legal advice.

If you or a family member has been charged with a road traffic offence, IBB’s specialist road traffic and speeding solicitors can help. Call or 01895 207928 or 0330 999 4999 for immediate help . Alternatively, email us at roadtraffic@ibblaw.co.uk.