DVLA Scrap Car Tax Refund: How to Claim It

If you’re about to scrap your car, you’re probably wondering what happens to the remaining vehicle tax on it.

The good news? You’re entitled to a refund for any full months left on your tax, and the DVLA will send it automatically once the process is done properly.

But that’s the key. You have to follow the right steps and inform the DVLA the correct way, or else you won’t get a penny back. Plus, you’ll be fined up to £1,000 and still be liable for whatever happens to the car.

In this quick guide, I’ll walk you through how the tax refund works after scrapping a car, what you need to do to trigger it and when and how you’ll get your money.

Overview of car tax and scrapping

What Vehicle Excise Duty covers in the UK

Vehicle Excise Duty (VED), which is what we call road tax or car tax, is a mandatory payment for most vehicles driven or kept on UK roads. It helps fund road maintenance and transport infrastructure.

You pay road tax in 12-month blocks. The amount you pay the first year depends on either your car’s engine size, or CO₂ emissions and fuel type, depending on when the car was registered. From year 2 onwards, the standard rate is £195.

How scrapping a car affects DVLA tax records

When you scrap an end-of-life vehicle through an Authorised Treatment Facility (ATF), the DVLA updates its records to show the vehicle is no longer in use. This means you’re no longer responsible for taxing, insuring or keeping it roadworthy.

Why refunds are issued automatically after scrapping

Scrapping effectively ends your obligation to pay car tax, but because tax is paid in advance, the DVLA has to adjust your account. If they had to process applications from every person who scrapped their car, it’d be inefficient. And if they kept the road tax, it’d be unfair. So, they auto-process the refund for you.

How the DVLA scrap car tax refund works

The DVLA only issues car tax refunds for full months of unused tax. So if your car is taxed through to December but you scrap it in September, you could get back October, November, and December.

Once your vehicle is marked as scrapped in the DVLA’s system, they’ll automatically:

• Cancel your Direct Debit (if you use it)
• Calculate the unused full months
• Send a refund cheque to the name and address on your V5C logbook

No need to apply. As long as the DVLA is properly notified, the refund happens without extra paperwork.

Steps to claim your tax refund when scrapping your car

Just because they process the road tax automatically doesn’t mean they know you’ve scrapped your car automatically. You have to notify them that the car has been scrapped and you’re no longer the registered keeper.

Here’s exactly what you need to do:

1. Scrap your car at an Authorised Treatment Facility (ATF).

Make sure the scrapyard or dealer is a registered ATF. This is a legal requirement in the UK. Only ATFs can issue a Certificate of Destruction (CoD), which proves your car has been scrapped properly.

2. Give the ATF your V5C logbook (but keep Section 4/9).

You’ll need to hand over the V5C (vehicle logbook), but keep Section 9 (or Section 4 on newer V5Cs). This part is for notifying the DVLA that you’ve sold the vehicle for scrap. ATFs deal with this process every day, so even if you’re confused, they’ll be able to guide you.

3. Tell the DVLA you’ve scrapped your car.

You can notify the DVLA online at gov.uk/sold-bought-vehicle or by posting Section 9 to:

DVLA
Swansea
SA99 1BD

Make sure the vehicle and trader details are correct because that’s what triggers the refund.

4. Receive your Certificate of Destruction (CoD).

The ATF will issue the CoD and send a copy to the DVLA. This confirms the car has been dismantled and is no longer on the road. You should get your copy within seven days from when you surrendered the vehicle.

5. DVLA issues a refund automatically once their records update.

Once the DVLA receives all the necessary info, they’ll cancel your vehicle tax and issue a refund. You’ll get a cheque in the post for any full remaining months. From my experience, this normally takes up to six weeks from ‘scrappage’ to ‘cheque in hand’.

Mistakes to avoid when claiming a refund

While selling 1000's of salvage vehicles via auction, in that time, we’ve seen quite a few mishaps, most of which are easily preventable.

These are the four main mistakes you’ll want to avoid:

Using an unlicensed scrap yard that fails to notify DVLA

Unlicensed scrap yards aren’t legally allowed to notify the DVLA or issue a Certificate of Destruction. If you use one, your car won’t be officially marked as scrapped and you won’t get your tax refund.

Always check that the business is a licensed ATF before handing over your vehicle (you can use the DVLA’s public register of ATFs).

Forgetting to cancel Direct Debit after scrapping

Although the DVLA usually cancels Direct Debit automatically, don’t rely on that alone. Log in to your bank and double-check the payment has stopped, especially if you didn’t receive confirmation from the DVLA.

Assuming partial months are refunded

The DVLA only refunds full remaining months of tax. If you scrap your car on the 5th of the month, you won’t get a refund for that month, so timing matters. If you already know you want to scrap your car, do it before the end of this month instead of procrastinating.

Not updating DVLA with correct bank or address details

Refunds are sent by cheque to the address on your V5C. If you’ve moved and not updated your logbook, do that before you scrap the car. Otherwise, the cheque will go to the wrong place and you’ll never see it.

If you follow the proper steps and notify the DVLA correctly, you’ll get a refund for any full unused months with no extra forms or needing to chase anyone down. But skip a step by using an unlicensed scrap yard or forgetting to notify the DVLA and that money’s gone.