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What is a Road Tax?
Road tax is nothing but a form of tax that a vehicle owner has to pay every year to the government. A road tax is technically called a Vehicle Excise Duty (VED). But you may know it as other names such as a car tax, vehicle tax or road tax.
The amount raised by the government through the car tax goes into the central government fund and is then utilized for the welfare of the general public with activities such as road projects or maintenance. Interestingly, your road tax is based on your vehicle’s carbon emissions. Vehicle owners should pay a road tax in either 6 or 12 months.
When Can You Cancel Your Road Tax?
There are certain circumstances under which it might be possible that you could save yourself from paying the road tax.
If you feel that you fall under any of these categories, you can contact the Driving and Vehicle Licensing Agency (DVLA) to exempt you or refund you. These circumstances are as follow:-
- If you have sold or transferred the vehicle to another person
- If the car is stolen
- The vehicle is registered as exempt from vehicle tax by the DVLA
- An insurance provider writes it off
- If the vehicle is taken off-road and registered under the Statutory Off Road Notification (SORN) to the DVLA
- Your vehicle has been scrapped
- The car has been exported from out of the United Kingdom
For claiming a tax refund or a cancellation on the vehicle tax, you will have to contact the DVLA and apply the matter. Generally, the DVLA, after reviewing the details of your application, will immediately cancel or refund your tax.
How do Road Tax Refunds Work?
Since the road tax is paid in advance in blocks of either 6 or 12 months, it becomes essential for the government to provide a facility with which vehicle owners can get a refund if they are eligible for one.
A person can avail of a refund if any of the circumstances mentioned above have occurred with their vehicle and they ended up paying for a more extended period than they are entitled to.
The DVLA only allows a refund on the full months of the remaining period.
It means that if you had paid the vehicle tax for 12 months and are in 4.5 months of your tax coverage, then you will be eligible for a refund of 7 months and not 7.5 months.
If you decide to sell your scrap or used vehicle, you would be entitled to claim back the outstanding tax amount by contacting the Driving and Vehicle Licensing Agency. The DVLA will immediately generate your tax refund if you are ready with the following requirements. 
If you notify the DVLA regarding the sale of the vehicle using a yellow section 9 of your registration certificate (V5C/3) or by presenting a certificate of destruction issued by the center of recycling. You can expect a refund within six weeks. According to the vehicle registration certificate, the DVLA will send a cheque to the registered person to whom the vehicle belongs.
Why Can You Not Get a Road Tax Refund?
In a situation where an individual has incurred a credit card fee, an extra charge from a six-month payment, or an additional expense incurred through a direct debit payment, you might end up not getting any vehicle tax refund. You would most certainly get a cancellation or a refund in any situation other than these.
Who is Exempt From Paying Road Taxes?
Some car owners do not have to pay taxes on their vehicles.
- If a vehicle is a brand new car under £40,000, it has a carbon dioxide emission of 0.
- If you are an owner of a car registered to the DVLA between 1 March 2001 and 1 April 2017, the vehicle induces a CO2 emission of not more than 100 grams per kilometer of driving.
In case you have some form of a disability, you would be exempt from paying any vehicle excise duty if you have:-
- You have an invalid carrier attached to your mobility scooter
- You are an individual who receives war pensioners’ mobility supplement
- You receive the enhanced mobility component of personal independence payment
You are also not supposed to pay taxes on ‘historic vehicles’, meaning a vehicle older than or is 40 years old.
An Important Requirement
One of the most crucial requirements for a tax refund or cancellation and owning a vehicle is the V5 document. A V5 document is essentially a vehicle registration document that helps the DVLA track the vehicle’s keeper. It contains essential details about the vehicle and owner. Ideally, you should always be ready with this document and not misplace, destroy or forget this document. If you lose the document, you will then apply to get a replacement logbook.
A replacement logbook can be ordered or obtained by you in case your original certificate is not with you. You can apply for it via phone, post, or online.
- Phone:- If you do not want to change the essential details on the original vehicle document, all you would need to do is pay £25, and the replaced document will be with you in five working days. It is the fastest way to receive the documents.
- Post:- Under normal circumstances, with no changes needed regarding the replacement document, then it will be quicker. If you want some changes in the details, you would have to pay £25 and wait for about six weeks. It might reduce the amount of your car tax.
- Online:- You can download an application for a vehicle registration certificate along with the green ‘new keeper’s details’ slip. Unlike other routes, this would majorly be considered an accessible route.
Remember that even after getting the replacement, you will have to go through the whole process of applying for a tax cancel or refund, which will take up to around six weeks.
