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Drivers receive £360m in vehicle tax refunds

Written by: Paloma Kubiak
More than five million drivers received a share of £360m in refunds of vehicle tax last year, official figures reveal.

Major changes to the vehicle licensing system took place in October 2014: the vehicle excise duty (VED) no longer stays with the car if it’s sold. Instead, when a vehicle changes hands, once the owner informs the DVLA, they will get an automatic refund of the ‘road tax’.

Drivers will receive refunds of any full months of remaining tax, calculated from the date DVLA gets the information.

Another major change was the move away from paper tax discs.

The DVLA is urging motorists to inform it of change of ownership, scrappage or SORN online, rather than by post, so refunds can be received faster. With postal declarations, it can take between four and six weeks for the new owner to get a new V5C document.

It comes as its figures reveal that more than 60% of drivers selling their cars don’t use the online service to inform the DVLA of any changes.

Recent Department for Transport figures revealed that since 2013, the number of drivers on the road without valid car tax has tripled since 2013.

The DVLA said it collects £6bn in VED every year but confirms that it has seen a 12-fold increase in the number of vehicles declared SORN which are subsequently driven on the roads. This false declaration can see cars clamped or impounded, the DVLA said.

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