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What you need to know about road tax when you sell your car?


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What you need to know about road tax when you sell your car?

From October 1, the car tax disc is being scrapped which means you no longer need to put the piece of paper in the corner of your car's windscreen.

The new changes come in effect from the start of next month but it still means, of course, that you need to tax your vehicle otherwise you could face a fine of up to £1,000. Although, several surveys suggest that as many as 50 per cent of people are not even aware the tax disc is being abolished.

Introduced in 1921, the tax disc is no longer required as the Driver Vehicle and Licensing Agency (DVLA) will now rely on a new electronic system with the Government predicting the new system will save the tax payer around £10million. Police already use automatic number plates readers instead of visually checking tax discs and they also rely on number plate recognition cameras across the road network so little will change in that aspect.

You can still pay for your road tax online, by post or at the post office and you will still receive a renewal reminder from the DVLA when your tax is due to expire. After October 1, you can remove the tax disc from your car but your car will still be taxed for whatever duration of time you have remaining on it. 

You will still be able to pay for 12 months or six months tax but will be also be able to pay by monthly direct debit. This is expected to cost five per cent more than paying for a full year in one instalment. However, direct debit will not be available for first registration vehicles, fleet schemes or heavy good vehicles (HGVs).

But when you sell your car or sell your van under the new system, any road tax remaining will NOT transfer to the new owner with the vehicle. That means, for example, if you are selling your car to Sell Your Jamjar or any other car buying website, it will not be transferred.

You will instead receive a road tax refund on any tax remaining on the car or van and the buyer will have to pay to re-tax the car. This is important because if you have six months tax remaining on your vehicle, for instance, it can no longer be included in any deal you might have done with the buyer. The new owner just needs use the New Keeper Supplement (V5C/2) part of the vehicle registration certificate (V5C) to buy new tax.

But, as the owner of the car or van, you will ONLY receive the refund if the DVLA has received notification that the car has been sold. If you want to scrap your car or it is being exported abroad or maybe even taken off the road with a Statutory Off Road Notification (SORN) then the DVLA still need to be informed. 

Sellers of vehicles are already expected to tell the DVLA of any ownership change on a car or van otherwise they could still be liable for speeding or parking fines incurred by the new owner. If you are buying a car and want to check it has road tax on it after October 1 then visit https://www.gov.uk/check-vehicle-tax - all you need to do is enter the vehicle registarion number and make of car and it tell you straightaway on screen.

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