Scrap Car Tax Refund

When you scrap your car, any remaining vehicle excise duty (road tax) is automatically cancelled and the DVLA issues a refund for the unused whole months. You do not need to apply for it. Here is how it works and what to expect.

How the refund is triggered

The refund process starts as soon as the DVLA receives notification that the vehicle has been scrapped. This notification comes from the Authorised Treatment Facility (ATF) that collected your car, which is required to inform the DVLA as part of the Certificate of Destruction (CoD) process.

Once the DVLA processes the notification and removes you as the registered keeper, the refund for any complete calendar months remaining on the tax disc is calculated automatically and a cheque is issued to the address on the vehicle record.

How much do you get back?

The refund covers whole calendar months remaining from the date the vehicle is scrapped. Partial months are not refunded. The calculation is based on the amount you paid divided by the total months of the tax period, multiplied by the number of complete months remaining.

Because partial months are excluded, it is worth scrapping early in the month rather than late. Scrapping on 2 March rather than 28 March means you recover the full March refund. In practice, the difference is around £7 to £15 depending on the tax rate, but if you are flexible on timing it is worth considering.

How long does the refund take?

The DVLA typically processes the refund within four to six weeks of being notified by the ATF. The cheque is posted to the address recorded on the V5C. If you have recently moved and not updated your address with the DVLA, update it before the car is collected to avoid the cheque going to the wrong address.

What if the cheque has not arrived?

If it has been more than eight weeks since the car was collected and you have not received a cheque, the likely causes are:

• The ATF has not yet notified the DVLA (should happen within seven days)
• The cheque was sent to an old address
• The vehicle record shows someone else as registered keeper (common with recently purchased cars)
• The car was on SORN and no tax was active, meaning there is nothing to refund

Check the vehicle's status using the DVLA's free vehicle enquiry at gov.uk. If the record shows the car as still registered to you weeks after collection, contact the ATF to confirm they have submitted the CoD notification. If the address was wrong, contact the DVLA by phone or online to report the issue and request the cheque be reissued.

What if the car was on SORN?

If your car was declared SORN (Statutory Off Road Notification), it was not taxed and there is no road tax to refund. The SORN is simply cancelled when the CoD is issued and you have no further liability. No refund is due or possible in this case.

Direct debit: monthly payers

If you paid road tax by monthly direct debit, the DVLA will cancel the direct debit automatically when the CoD is processed. There is no lump-sum refund for monthly payers because each month's payment is made as it falls due. The last payment processed before the car is scrapped is not refunded, but no further payments will be taken after the keeper change is confirmed.

Check your bank account in the weeks after scrapping to confirm the direct debit has stopped. If a payment is taken in error after the CoD date, contact the DVLA.

Frequently asked questions

Can I get a refund if I scrap the car on the last day of the month?

No. The refund is for complete months remaining after the date of scrapping. If you scrap on the last day of a month, that month is the current month and no refund is paid for it. The refund begins from the following complete month.

What if I transferred the tax to my new car before scrapping?

Road tax is no longer transferable between vehicles. Since 2014, tax stays with the vehicle. When you sell, scrap or transfer a car, the tax is cancelled and refunded to the seller. The buyer of the new car must tax it separately. So if you had previously been told you could transfer tax, that is no longer the case.

Is the road tax refund taxable income?

No. A road tax refund is a return of money you overpaid to the government and is not treated as income for tax purposes.

I never received my Certificate of Destruction. Could that delay the refund?

Yes. The tax refund depends on the DVLA receiving the CoD notification from the ATF. If the ATF has not yet submitted it, the refund will not have been triggered. Chase the ATF directly for the CoD reference and check the vehicle status at gov.uk to confirm the scrapping has been recorded.