Road Tax question - help needed please

[AnilS]

Guys need some help with a road tax question.

Our son is looking to buy a used, but high value car.

On 9th May, 2018, it originally sold for £54k.
Luxury road tax (£600/year, in rounding up) doesn't reduce until May this year, to much less.

If he collects the car on 1st April, and pays by direct debit, will June's DD payment show a reduction or not?

If not, is he better off waiting until the end of May, making it SORN (Statutory off road notification), and then re-taxing on the 1st June, for the reduced rate?
Tried to get through to DVLA but hopeless. Spoke to the dealership but they don't know either. The car is a private sale but may go to the dealer for a service.

He won't want to wait until until 9/5/24 to benefit from the reduction as he wants to drive the car asap.

Any input appreciated. Thank you.

 

[Sue Pertwee-Tyr]

Can he tax the car, then cancel the tax in May and obtain a refund of the unused tax (as he would if selling the car)? Then re-tax from fresh.

 

[Tony Lockhart]

From another forum

“Don't know about DD but if you buy the tax for a year the rate is calculated at x mnths of the high rate and y mnths at the low rate, add them together and there's you tax bill. So I assume (but not certain) that paying by DD, the above calculation will be done and then divided by 12 to get your monthly payment.
If that is correct then the DD won't 'automatically adjust' but you will be getting the mixture of high rate and low rate spread over the year”

 

[Tony Lockhart]

And a couple more replies:

“Had the same situation with a car I bought, because the luxury tax ran out in 5 months I could not tax it via monthly direct debit, had to pay for 6 months or 12 months in full but the price took in to account the change in price after the 5 months.”

And

“
Nope, if monthly, will pay higher rate for relevant months. Once of an age, the rate will drop to the £16pm or whatever it is now for the remainder.

eg
1 15 March 2024 £49.90
2 2 April 2024 £49.87
3 1 May 2024 £49.87
4 3 June 2024 £49.87
5 1 July 2024 £49.87
6 1 August 2024 £49.87
7 2 September 2024 £15.75
8 1 October 2024 £15.75
9 1 November 2024 £15.75
10 2 December 2024 £15.75
11 2 January 2025 £15.75
12 3 February 2025 £15.75”

 

[AnilS]

Can he tax the car, then cancel the tax in May and obtain a refund of the unused tax (as he would if selling the car)? Then re-tax from fresh.

This is what I suggested to him but others told me to go through the monthly route.

And a couple more replies:

“Had the same situation with a car I bought, because the luxury tax ran out in 5 months I could not tax it via monthly direct debit, had to pay for 6 months or 12 months in full but the price took in to account the change in price after the 5 months.”

And

“
Nope, if monthly, will pay higher rate for relevant months. Once of an age, the rate will drop to the £16pm or whatever it is now for the remainder.

eg
1 15 March 2024 £49.90
2 2 April 2024 £49.87
3 1 May 2024 £49.87
4 3 June 2024 £49.87
5 1 July 2024 £49.87
6 1 August 2024 £49.87
7 2 September 2024 £15.75
8 1 October 2024 £15.75
9 1 November 2024 £15.75
10 2 December 2024 £15.75
11 2 January 2025 £15.75
12 3 February 2025 £15.75”

@Tony Lockhart so monthly is best?

 

[Tony Lockhart]

This is what I suggested to him but others told me to go through the monthly route.

@Tony Lockhart so monthly is best?

Well, I think I’d do it that way.

 

[twotone]

There was an article about this in the Sunday Times last week I think.

We bought a Mercedes — then got an extra £2,000 tax bill — The Times and The Sunday Times

Drivers thinking about buying a new family car might want to check the price tag, or risk being hit with a hefty charge on top. Those who buy a car with a list price of more than £40,000 have to pay an extra £390 a year in road tax, also known as vehicle excise duty (VED). This is a flat rate...

apple.news

 

[gez]

This is what I suggested to him but others told me to go through the monthly route.

@Tony Lockhart so monthly is best?

Well just from reading the quotes Tony posted, I'd say the answer to that question would be another question:

Can you afford to pay the higher monthly payments initially, knowing they'll be followed by lower ones? If the answer is no, or you'd prefer not to then, as I read the quote about paying 6 months/year, (the payments are averaged out so lead to a lower set of initial payments - until the cross over date - but then higher ones afterwards), would be the route to go.

 

[twotone]

This is what I suggested to him but others told me to go through the monthly route.

@Tony Lockhart so monthly is best?

Edit.

 

[AnilS]

Thanks again guys. Much appreciated. Digested your thoughts.

I think, in this situation, I'll ask him to buy 6 months road tax, not DD.

At the end of May, SORN the car.
Then on the 1st June, re-tax the car, when it should be at the lower rate.

Sound feasible?

 

[Tony Lockhart]

Perfectly feasible. Just don’t forget

 

[AnilS]

We picked up his new car, privately, and when paying for the road tax online, we have the answer, should it be useful to anyone else.

We selected direct debit first.
April would have been £52 (1st month) and thereafter, £16 so it does pro rata down for the remaining 11 months. Why DVLA couldn't say this on the phone, beggars belief.

As it was £224, for a one off payment, for 12 months, that's what I advised he bought. So he did.

Car is now at home.

Thanks again guys.