Car tax refund rules explained
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Quick answer: When you sell or scrap a car, DVLA refunds unused full months of vehicle excise duty automatically — partial months not refunded when selling mid-month.
When you sell or scrap a car, DVLA refunds unused full months of vehicle excise duty automatically. SORN stops tax but you must still insure the vehicle if it is kept on a public road. This guide explains timing and direct debit cancellation.
Selling process
Tell DVLA immediately online using your V5C log book when you sell. Once the buyer registers the vehicle, your refund process starts automatically.
With dealer part-exchange, confirm the dealer has notified DVLA correctly. Check that the refund is triggered to you and not lost through an administrative error.
Scrap and export
A certificate of destruction from an authorised treatment facility triggers your refund and ends your liability for the vehicle. Keep a copy for your records.
Export notification uses a different DVLA form, but the refund rules for unused full months still apply when the vehicle leaves the UK register. Notify DVLA promptly to start the refund process.
Insurance gap
You must insure the vehicle until it is sold even if you declare SORN, provided it remains on a public road. An uninsured taxed vehicle risks a fine and potential clamping.
The buyer's insurance is valid from the moment of purchase. Cancel your policy once DVLA confirms the transfer of keeper has completed.
Common questions
How long does DVLA refund take?
Usually within six weeks by cheque or direct debit reversal to the registered keeper's address or bank account. Contact DVLA if you have not received the refund after eight weeks.
Do I get refund if I SORN the car?
Yes for unused full months after the SORN date. The same full-month rule applies as when selling the vehicle.
Must I cancel direct debit myself?
Yes — notify DVLA and cancel the direct debit with your bank. This avoids a duplicate payment if your renewal date falls soon after the sale.