Can You Transfer Tax When Selling A Car?

Over the years, there have been some changes to rules regarding vehicle ownership and tax payments. This is the reason why we will focus on whether you can transfer car tax when you sell a car or if there has been any change to this law. We will also explore the consequences of driving an untaxed car on public roads and how to avoid it. In the end, we will discuss the process of car tax payment.

Can You Transfer Tax When Selling A Car?

No, you cannot transfer the remaining amount of your car tax when you sell a car. Since the abolishment of car tax discs in 2014, it is no longer possible to transfer car tax to the new owner of a car when you sell a vehicle. However, when you inform the DVLA about the sale and new ownership of your car, they will refund the remaining amount of your car tax to you (the previous owner).

As the seller and previous owner of the vehicle, it is your responsibility to inform the DVLA that there is a change of ownership of the vehicle previously owned by you so that you are no longer held liable for updated paperwork as well as how the car is used on a public road. Failure to inform the DVLA of a change in ownership of the car can cause you a fine of £1,000.

Once the vehicle’s ownership is transferred to the individual who has purchased it from you, they will be able to get insurance and drive it on public roads. Untaxed and uninsured cars can be fined, clamped or impounded by the DVLA as the police use Automated Number Plate Recognition to track such cars. 

New buyers will need the following information from you so that they can tax the car before driving it:

• The 11-digit reference number mentioned in the vehicle logbook or V5C if the vehicle has been registered in the new owner’s name
• The 12-digit reference number on the New Keeper Supplement or V5C/2 if the vehicle has not been registered in the new owner’s name yet

The same rules apply when someone is merely transferring ownership of a car to a family member and not selling it.

New owners will have to commence with a fresh car tax once they buy a car. They can do this online by using the DVLA’s automated phone service on 0300 123 4321. This service is available 24 hours a day and 7 days a week.

They can also visit the nearest Post Office branch that deals with car tax.

What Happens If Someone Forgets To Tax A Newly Bought Car?

If you pay your car tax late, you will have to pay a fine of £80 in addition to your car tax bill. This is a penalty charged by the DVLA for non-payment of car tax by the due date mentioned in your V11 reminder notice. If you make this payment within 28 days, the fine will be reduced to 50 per cent making it £40. However, you will not get any points on your license at this time.

However, if you do not pay the fine within the stipulated time, the amount can increase to £1,000 and you can be taken to court or your vehicle can be clamped so that it cannot be driven until the fine is paid.  

With the abolishment of car tax discs, there are no grace days anymore to pay your car tax. If you have purchased a new car from a dealer, you must make sure that the car tax is paid before driving away your new vehicle on a public road. In the case of a second-hand car, you will need to have the logbook changed to your name and pay car tax before driving the car.

If your car has been clamped due to unpaid car tax, you will be required to pay your car tax as well as a penalty to get your vehicle released from the DVLA.

How Should A New Buyer Tax Their Car?

If someone has bought a brand new car and they are the first owner, they should check whether or not the car tax has been paid as dealers usually make such arrangements. Most of the time your car tax is included along with the price of your car and any registration fee that is to be levied. 

In the case of a second-hand car, the previous owner needs to add the new buyer’s name (and other details) to the “new keeper” section of the V5C and send it to the Drivers And Vehicles Licensing Agency. The DVLA will give the new owner a green slip that they will need to keep safe as it is the proof of their ownership of the car until the car log book certifies it through the DVLA. 

New buyers can use the 12-digit number that appears on your green slip (also termed as your V5C2 reference number) to pay their car tax while they wait for the vehicle logbook to be renewed/transferred to their name.

To pay car tax online from the post office, the new owner of the car will need the following documents;

• Car tax reminder or V11 letter
• An MOT test certificate
• The amount of payment mentioned in the V11 letter

In addition to car tax details, if a new buyer is interested in checking the history of a recently purchased second-hand car such as CO2 emissions, engine size, weight, fuel type, export status or SORN status, they can get vehicle information from DVLA.

Conclusion:

The above discussion helps us arrive at the conclusion that car tax cannot be transferred from a previous owner to a new one when a vehicle is being sold (althouth this was a common practice in the UK until 2014). Therefore, the previous owner must inform the DVLA about the new ownership of a car once they make the sale and the new owner should apply for car tax.

FAQs: Can You Transfer Tax When Selling A Car?

Do you get a tax refund if you sell your car?

Yes, you get a tax refund if you sell your car. Since car tax cannot be transferred to the new owner of the car and they will be required to tax the car in their own name, the remaining amount of your car tax will be refunded to you by the DVLA.

Do I have to tax a car I just bought?

Yes, it is a legal requirement in the UK that you must tax the car that you’ve just bought even if you will only be driving it home. If you’ve bought a car from a dealership, they will manage this for you before handing over the

Can I change ownership of a vehicle online?

Yes, you can change ownership of a vehicle online if you have the 11-digit reference number from the car logbook.

How do I transfer ownership of a car to a family member in the UK?

The most convenient way to transfer ownership of a car to a family member in the UK is by using the DVLA’s website. Once you add relevant details including the 11-digit reference number from the V5C, you will be issued a green slip that can be given to the new owner of the vehicle.

What paperwork do you need when selling a car privately?

Whether you sell a car privately or through a dealership, the most important paperwork regarding the vehicle is its logbook or V5C which needs to be registered in the new owner’s name as proof of transfer of ownership.

References:

How do I transfer ownership and tax for a used car I’ve bought? | AutoTrader.

What happens to the road tax when you sell your car?

Vehicle tax disc abolished: changes you need to know – GOV.UK

The DVLA Tax Loophole: Vehicle tax is No Longer Transferable – IBB Law

Can I Transfer Road Tax to a New or Second-hand Car? | Adrian Flux