First Year Road Tax

[CJ Underhill 34]

Probably a stupid question... however i haven't sold "new" cars since the new rules on refunding the tax came in

 

Basically, im looking at buying an ex demo (registered before the new car tax rules this year). The first year road tax is about £500, and subsequent years tax is £270. Im guessing the dealer has paid the first years road tax, but will then get a refund when they sell it to me? Will i have to pay the first years tax again? or just the subsequent tax?

[GreenGiant 287]

Coincidentally, I have just had a conversation with a chap at the DVLA about this very thing. As it stands, the first licence fee is a one time fee only paid upon registration. So when you buy a nearly-new car as a second keeper, the tax due upon purchase will be the standard rate for that vehicle whenever that is (even the day after registration), in your case CJ, £280 as it went up on 1 April.

The seller will get a refund for unexpired tax based upon the standard rate, not on the first licence fee. So they will get an amount equal to £270 divided by however many full months are left. (Not £500 divided by...)

 

However, under the new system introduced on 1 April, there is a bit of a fly in the ointment that the man in Swansea was unable to clarify:

The new First Licence rates for some cars (those with CO2 of 100g/km or less) is less than the new Standard Rate (£140), so any refund due in year one, if calculated the same way, could mean a refund of more than the First Licence rate paid, which obviously isn't going to happen. But he didn't know what would happen. So that's still open for discussion in Swansea.

 

[CJ Underhill 34]

Cheers Greengiant, been trying to figure it out for days now.