Frequently asked Motor Trade Questions about Tax Disc changes

Image of tax disc

On the 1st October the paper tax disc is being scrapped and replaced with a new electronic system. This means that motor traders will need to physically remove tax discs from the vehicles in their care as well as adapt to a number of other changes.  We have previously talked about the relationship strain between the DVLA and motor trades however that relationship is now about to change, find out more…

What are the new road tax rules for motor traders?

As of October motor traders will no longer be able to buy a vehicle with a valid tax disc as tax will no longer be transferred when changing ownership of a vehicle. However, motor traders will still be able to get trade plates as long they keep within the rules and regulations. Otherwise, the vehicle should be registered under the name of the trader so that you can apply for road tax.

Is there any change for motor traders when notifying a sale?

Traders will not need to register an ownership transfer but the registered owner will be required to notify the DVLA of the sale.

Trade Licenses

There will be no need for motor traders to physically show a trade licence but they will still be required to pay and apply for trade licenses when they are due. The paper licence, like the paper tax disc, will no longer be issued as it will all be carried out electronically. Trade plate display and conditions will stay the same for motor traders.

What if you fail to inform the DVLA of a sale?

The senior consumer services manager at hpicheck.com, Shane Teskey, said: “Sellers who fail to inform the DVLA could be fined and they will still be liable for any speeding or parking fines and vehicle tax for a car they don’t even own any more. We remind sellers to always send the V5C to the DVLA, rather than relying on the buyer to do it. And if they scrap a vehicle, they should get a Certificate of Destruction from an authorised treatment facility.”

Refunds on tax when selling your car

After the sale of a vehicle you will receive a refund directly from the DVLA for the time left on the tax. The refund will be processed once the DVLA have been notified of the change on the V5C (Vehicle Registration Certificate). The same will happen if a new owner declares the vehicle as Statutory off Road Notification (SORN). The refund will be given for the full months that remain and not for partial months and the money left for the rest of the partial month shall be lost.

How can I pay?

When purchasing a new car motor traders will need to pay the road tax as soon as they start to drive it. There will be no grace period when buying a new car as you can phone the DVLA 24/7 to buy your tax or order it online.

If the vehicles are registered to the motor business then how will refunds be issues to the motor traders?

The refunds for tax discs will still be made to the business registered with the DVLA. The motor trade business will receive their refund once the DVLA has been notified of a change on the Vehicle Registration Certificate (V5C).

What if the tax disc is lost?

You will still need a tax disc displayed up until the 30th September so you will need to apply for another paper tax disc.

What do motor traders need to do when selling a vehicle?

The DVLA must be notified that a sale or transfer has been made, after which a refund for any full months’ worth of tax will be made.

What if the refund is paid to the wrong person?

The refund will only be paid to the person who is on the DVLA vehicle register. When the vehicle is sold, the refund will be processed once the DVLA receives notification.

Photo by exfordy / CC BY 2.0

  • Adrian

    What about part time traders

    • GoMotorTrade

      In general, the same rules will apply to part time traders. Is there something specific you would like to know more about? – GoMotorTrade

      • Mohammed Zaman

        I am a part time trader, on a sole trader basis. The cars are bought in my business name, but my bank account is in my full name…will this impact any dvla refund, or will it be solely based on the bank account details I provide. I presume that with the drive to go paperless we won’t be receiving cheques.

        • GoMotorTrade

          Apparently the DVLA will still be issuing cheques, however we’d double check with them just to make sure! – GoMotorTrade

  • Arthur

    How would it work after 1st of october then? Im a part time trader, buy a car off a private seller,fill the yellow section with my details, send it off to dvla and keep logbook.It may take me 2weeks to sale a car usually advertised on the road.Therefore i will have to buy tax to keep it legally on the road, but what if it sells within a week? Will i get refund even if the proper v5 is not and will not be in my name?Will DVLA send refund to my address as i put it on yellow slip? Thank You

    • GoMotorTrade

      If the cars are kept on the road you will need to register them in your name and then tax them. Once bought the new owner will have to tax the vehicle straight away and you should receive a refund. – GoMotorTrade

  • scott

    so if i purchase a car after September the 1st as a motor trader and advertise it for sale. can i just sell it with no tax?????? sorry if this is a silly question but i am struggling to get my head around this new tax law.

    • GoMotorTrade

      After October 1st it will be the new owners responsibility to tax the vehicle as soon as they buy it. – GoMotorTrade

  • http://Arburyautos Andy Moseley

    Have I got this right, if I want to drive 1 of my vehicles I have to put it in my name?
    What if I sell it the next day?
    My wife is on my trade policy so I will have to put a car in her name aswell?
    If I put five cars in my name in a month which I have sold I could be out of pocket by £70/£80 ?
    Looks like we’re going to have scammers making plates

    • GoMotorTrade

      Unfortunately if you drive the vehicles you will still have to tax them, which means if you sell them in a week you will lose some money. – GoMotorTrade

      • paul

        can the trade still use these cars that have tax on them until the car is sold then the new owner would need to re tax

        • GoMotorTrade

          Once you send of the V5 you will be able to use the cars either with trade plates or taxing them in your name. However if unsure make sure you check with the DVLA. – GoMotorTrade

  • mark murphy

    We have a few vehicles in stock that have existing Tax discs. The vehicles are “IN THE TRADE”. What is the position with these discs, can we still put them on when we sell the car

    Thanks & regards

    • GoMotorTrade

      According to the DVLA, as of the 1st of October the tax will have to be bought on the spot by the new owner, any tax left on the tax discs will be refunded to the previous owner. – GoMotorTrade

  • Al

    Hi.i’m a part time trader.i buy the cars from auctions.according to dvla i have to be the registered keeper of the vehicle to tax it,right? But to put it in my name it takes at least 2 weeks to get the new v5c in my name.what if i sell it the next day after i purchase it? Obviously i dont have a v5c because its sent to dvla to put it in my name.so how can i sell it with no v5c?

    • GoMotorTrade

      In order to tax a vehicle you need to be the registered keeper, which is why the DVLA suggest using trade plates and not selling vehicles without their log books – GoMotorTrade

  • wendy

    I’m a bike trader. My bikes come from private sellers sometimes with tax sometimes without.

    I understand that each bike will lose any previous tax. But when shall the new tax start? If it’s sitting in my showroom does it need to be taxed? It could be there a day or a month, as a seller we don’t know how long.

    I also often nee to take a bike somewhere for repair, so I should tax it just for this one journey and lose a month?

    I’m one sense it’s good that individuals are made account table for their own tax from the point of view of a seller it sounds
    like we are getting shafted.

    • GoMotorTrade

      Your trade plates should cover you if you are keeping the bikes in a showroom and only take them out for repairs, however you need to double check with the DVLA. – GoMotorTrade

  • Naveed

    i am home trader do buy and sell cars privately ,but not register the cars on my name what will happened in my case as i got motor trade insurance and i occasionally use the cars also for personal use

    • GoMotorTrade

      If you are using vehicles for personal use then they will need to be registered in your name and taxed. When it comes to your motor trade insurance it’s best to check with your provider! – GoMotorTrade

  • http://Gomotortrade.co.uk John

    I got trade insurance which i can drive any car for social and pleasure, what if i borrow my friends or family members car to go to shop or borrow for few days will i be allowed to drive them?

    • GoMotorTrade

      It will depend on your motor trade insurance policy, best to check with your provider! – GoMotorTrade

  • brian colliss

    im a car dealer what happens to the road tax which is on my cars now which i own and the road tax after oct 1st if the cars are only regitered to me on yellow slips will this mean a lot more owners in v5s if every dealer has to tax them each time just another thing to hit the car dealer what a load of rubbish

    • GoMotorTrade

      If you are using trade plates you will not have to tax the vehicles and the road tax remaining on the vehicles will go to the previous owner once the car changes ownership – GoMotorTrade

  • Taimoor

    I’m a part time trader and run the business from home on & Off, do have a trade insurance on which my wife is also added. Now what needs to be done for the cars I have in possession ? Couple of cars are not registered in my name but are in personal use & have valid paper road tax disc.
    Do i need to notify DVLA about the status of the cars by filing in the yellow slip of log book ? what if a car is bought without log book ?
    Any help will be appreciated.

    • GoMotorTrade

      You will need to inform the DVLA of the vehicles you have in your possession. If you don’t have the log book it’s best to contact them – GoMotorTrade

  • Clive Norman

    Hi. I am a sole motor trader with out private parking facilities, I have the following points that I am hoping you can assist me with within the new car tax rules from 1st October..
    My understanding is:
    1. If I buy a car and send off section 9 of the V5, that vehicle from the purchase date will not be taxed.
    Q 1. Will a “TRADE CAR LICENCE” cover that vehicle on the road, parked or driven?

    Q 2. Does a “TCL” only cover one car or multiple cars for being “PARKED”on the road?

    Hope you can assist.Clive

    • GoMotorTrade

      Hi Clive, trade plates do not cover cars kept on the road. If you want to drive or park your vehicles you will need to tax them – GoMotorTrade

  • Mahomed Siddikmia

    I am very disappointed with this new system. I bought a car in May which was untaxed and on sorn at that time. The car was non runner and took a while to get it sorted. Only managed to get it on the road in mid September and taxed the vehicle as I am part time trader. The v5c in not registered in my name but how ever I left the yellow slip with the previous owner to post off. Now as I enquire am told that when the car is sold only the registered owner gets the refund. How is that possible. I am totally gutted on hearing this. It’s not fair on part timers like us. The car is not selling at the valued price I am now using it daily if I registered it under my name that devalues the vehicle and I also my £160. After 1st of October I cannot drive the vehicle either. What sort of system is this.

  • keith

    Hi all. We are a motor trader and if we tax vehicles today on the green slip on behalf of the customer and send the v5 off to the dvla tommorow is that ok and will the tax stay valid or will a refund be made when the dvla change the ownership???

    • GoMotorTrade

      If a car changes owner as of the 1st of October then the new owner should arrange for the tax to be paid and the previous owner will be refunded once the DVLA receives the V5 – GoMotorTrade

  • http://www.kmbarkermalton.co.uk Jacqui Rooke

    I understand what happens with tax discs on Part exchanges as from today, but we have a number of vehicles in stock before the 1st October that have some Road Tax on. Are these Road taxes null and void or can they be passed to the next owner.
    I just need to check that if we send a V5 with change of ownership for these cars, when sold, that a refund would not be made to the previous owner. Concerned that the new keeper may be fined!

    • GoMotorTrade

      Generally, if there is still tax on a vehicle then the previous owner will be refunded and the new owners will need to tax the vehicles straight away. – GoMotorTrade

  • sarah

    hi i am a part time traders ,i park my car on the road, i know that i still need to have a road tax,but the car will not be in my name couse am selling those car.is it possible for me to get a road tax just for a month so i dont lose money or can i do direct debit,and if i can pay monthly will i get the refund ,or does the name on the lockbook recive it.

    • GoMotorTrade

      You will have to buy 6 or 12 months road tax still but you can pay for it monthly and then receive a refund for any remaining full months once the car changes ownership. – GoMotorTrade

  • gail

    i have sold car on the 29th sept 2014 with 6 months tax on it what if any new rules apply to me

    • GoMotorTrade

      If the V5 was signed on the 29th the old rules apply, however if it was after the 1st the new rules apply. – GoMotorTrade

  • http://pacemotor.co.uk Will Hicks

    My understanding is that when a vehicle is sold any remaining tax is automatically refunded to the registered keeper, my query is, at the point of sale we still need to go to the post office and purchase tax for the vehicle and new keeper as the new online system for purchasing tax makes no allowance for purchasing tax for a new keeper to enable them to drive the vehicle away? and, in addition to this, we post off the V5 in the new keepers name (after we have taxed it), this notifies DVLA that the vehicle has changed ownership, does the new tax we have just purchased then get refunded to the previous keeper or is there something in place to prevent this?

    • GoMotorTrade

      New owners should be able to pay for their tax straight away either online or by phone. Therefore you will not have to purchase the tax for them. – GoMotorTrade

  • John Cooper

    If driving a used vehicle on trade plates what happens if the ANPR picks up the registration number but fails to pick up the trade plates which nowadays are usually displayed in the front and rear windows because there is no way to fix them over the number plates?????

    • GoMotorTrade

      The ANPR will automatically detect the registered keeper and will flag up if it’s in the trade, meaning there shouldn’t be an issue. However, if you do experience an issue you should call the DVLA. – GoMotorTrade

  • http://www.autos2u.co.uk geed

    We have a trade in vehicle which has a road tax disc until the end of Dec 2014. It has been ‘in trade’ since section 9 was sent to the DVLA on 15/08/2014 and we have been using it on the road as our trade insurances legally allows us to do. According to the govt website the car is still legally road taxed. Will it be legally road taxed until the vehicle is sold? When the vehicle is sold, the current road tax is then null and void after the DVLA are notified via posted V5C of the new keeper. Even though the vehicle is in trade, it is the previous registered keeper that receives the road tax refund even thought they do not own the car and have not so for some time, is this correct? Thank you

    • GoMotorTrade

      This is correct, however it is always best to check with the DVLA if you are unsure. – GoMotorTrade

  • Margaret Gordon

    If road testing or taking a vehicle for MOT which isn’t taxed and using trade plates what happens if ANPR picks up reg.no. but not trade plates. In this car the vehicle is not registered to the trader. Would keeper be fined ?

    • GoMotorTrade

      If the ANPR picks up the wrong number plates the keeper may need to contact the DVLA to discuss the issue, especially if they receive a fine – GoMotorTrade.

  • rob

    Hi
    I’m a part time trader just starting out. I was of the understanding that I can get tax for a vehicle I have brought in as a stock car and use it for personal use then once it’s sold, the remaining tax would be refunded to my company name…. Is this correct??

    • GoMotorTrade

      Hi Rob,

      This should be correct but it’s always best to double check with the DVLA first! – GoMotorTrade

  • alx

    i think there is no real benefit to public, or traders, as if we buy a car as a trader, tax it for 6 months, sell the car within 1 week of purchase, we will loose a percentage or a full month of tax money, then the same vehicle will be taxed by the new owner, so realistically dvla are receiving 2x the money for same vehicle being taxed twice within the same month?
    Not to mention not every single person who sells a vehicle will have time or knowledge to claim back (maybe 1 month of old tax) so lets guess where them unclaimed refunds go…
    also not every small/part time trader has off road parking facilities for more than 1 vehicle, seems like theres only 1 real winner from this…… £££

  • RobQ

    I am a small motor trader and this is another example of the arrogance of the governmental institutions, making life easier for them and extremely difficult
    for the rest of us, while at the same time netting them a shed load of stealth tax. Although I do agree the tax disc system did need changing this new idea has not been well thought out and dose not accommodate people like myself. Why not just put the road fund licence charge on the fuel, a much simpler and fairer way then the people who use the
    roads the most pay, including foreign drivers

  • Al

    Hi, I have a very simple question, As a part time trader, can I buy cars and fill in my details on yellow Part (Section 9) and tax the vehicle? Will I be refunded when I sell it and new owner fill in the same logbook filling the (New Keepers Sections 6, 8 and Section 10).
    Also when calling at automated system for the tax, it has 3 options only, 1. Tax with reminder, 2. Tax will existing Logbook, 3.Tax with new keeper supplement, which option as a trader we should select?

    So far according to my search and understanding, there is only one way for trader to buy and drive the car is Using Trade Plates and keep the car stock off the road at any time. Please guide me if there is any beneficial information available. I am very much stressed as not having any place to park the car off road.

    Many Thanks

    • GoMotorTrade

      Hi Al, you can purchase a vehicle, register as the owner and then tax it so it can be kept on the road. Once you come to sell it you should get a refund once the new owner fills out the logbook. To find out more you could try the DVLA website. – GoMotorTrade

  • Affy

    hi. I have a traders policy which a covers me and wife to drive for social domestic & pleasure. We can’t afford our own car as I have ploughed all money into the business. How can we still legally drive the cars we own which are for sale and not in our name. Can’t I just tax using new keeper supplement ? I don’t care about refunds…

    • GoMotorTrade

      You will need to check with your motor trade insurance provider when it comes to what cover you have. As for the vehicles you will need to register them in your name and tax them if you wish to use them. – GoMotorTrade

  • graham

    we have purchased a car in september 2014 and paid for the 10 months tax that is already on the car, the car is stored on our car park to this day 7th November 2014, and now the previous owner has died, the logbook is still in her name, when i sell the car what happens to the tax disc that is on it.

    • GoMotorTrade

      Hi Graham, if you don’t have the logbook you will need to contact the DVLA to let them know. – GoMotorTrade

  • Jason mcknight

    Hi, I am a part time trader/mechanic, I have took a car in part exchange and filled out the yellow slip to sign car to trade, it was parked off the road on driveway, it has been for sale since. The DVLA van put a notice on the car and have received a fine in the post for keeping a car untaxed! Is this right? I feel that it is unfair if this is the case!!

    • GoMotorTrade

      Hi Jason, unfortunately you will need to talk to the DVLA about this one! – GoMotorTrade

  • jay

    Hi, I’m part time new trader, I recently sold my first car bought from auction and filled in the logbook new keeper section got it signed by the new owner , but where do I sign as I’m not the registered keeper?? Surely I can’t sign in registered keeper section be cuzzy it’s not in my name as the auction kept the yellow slip, so what do I sign if I have to ?

  • Wali

    Hi,
    I Am a part time trader. I buy the cars from auctions and sale them again. According to dvla I have to be the registered keeper of the vehicle to tax it, But to put it in my name it takes at least 3-4 weeks to get the new v5c in my name. What if I sell it the next day after I purchase it? Obviously I don’t have a v5c because its sent to dvla to put it in my name. So how can I sell it with no v5c?

  • Mechell

    Hi,

    What happens if I have bought a new car and the car dealer has kept the V5 and sent this off instead of myself- can I still call up and set up a direct debit for my tax on the car?

  • arya

    I am home motor trade. If I register my trading cars and send the yellow part to dvla. Does this change the owner ship ? Means if the car has one owner after sending the yellow part the new logbook will showing 2 owner?

  • arya

    I buying cars from auction as trader. How can I register the car in dvla for taxing and refundin the tax without yellow part coz auction cars logbook are without yellow part

  • http://gomotortrade scott parks

    Help please. My car is in my name but my friend as insured it on his traders policy. Am I legal to drive it and claim if I have an accident? Thanku

  • MoJo

    A private trader has just told me that the car I’m looking at will cost me £99 on top of the sale price for tax – which will be transferred on sale. He said that as he has not filled in the ownership form, he can just fill mine in and the tax gets put in my name. Is this correct?

  • http://Cars4U Adam K

    These new road tax laws are a shambles!!! Ruined my business!

  • http://google sajjad hussain

    do i need to road tax car if iam borrowing car of friend with their consent .

  • http://google sajjad hussain

    do i need to road tax car,if borrowing from a friend with their consent…

  • ken

    say i buy a car to sell but only going to have the car for say a week cant i tax online using green slip but not filling in v5 and passing on to who ever buys the car

  • James roy Bryan

    hi I’m exchanging my car but I have a private number.
    Can I remove the private plate off my car and place them in the front and rear windscreens whilst I’m driving down to exchange my car.

  • Stewart

    I’ve been buying cars to clean up and sell on, I own one car full time, and currently 3 others to sell, there all taxed and current MOT, in the case of two MOT is due soon after purchase, so I’ve been putting each car on my insurance as an when required, so one car was coming to the end of its warranty so taken for dealer inspection and another taken to get new brakes fitted, so I’ve added the cars for exactly the days required, or a bit longer to run about in.. Now I’m told indeed full time insurance on each car.. Or declare car SORN.. Which would in this case mean a continued switching and loosing a month at a time in TAX… Is there a better way.. As far as I’m concerned when any of those cars are I the road there 100% legal..

  • shine

    Hi,I am a part time trader and having a motor trade insurance.
    My question is ‘Is it possible to tax a car that I am buying for trade by keeping the previous owner name on v5c ?’
    if not what is the procedure to do so without changing the v5c to my name?’
    Thank you

  • Sara Smith

    My sister has just left a unhappy marriage with her small daughter. She took her car to transport and provide for her daughter.

    Unfortunately, her husband cancelled the payment for the car tax and did not let her know. As a result she has recieved a fine, that she is unable to pay, for driving without any tax.

    In this case, a tax disc in the windscreen would have been so much easier and this act of revenge could not have taken place.

    Is there anything that she can do in this situation? Any help or advice is greatly appreciated.