How do I Tax Second-Hand Car?

It is imperative to understand that when an individual is purchasing a second hand car, it is necessary to tax it at the point of purchase (sale) as tax is non-transferable. An individual can tax their vehicle by using a reference number mentioned on the following:

• ‘last chance’ warning letter from Driver and Vehicle Licensing Agency (DVLA) or a recent reminder (V11).
• the green ‘new keeper’s detail's' slip (V5C/2) from a vehicle log book that has been recently purchased.
• Vehicle log book (V5C).

The tax amount can be paid either by credit or debit card, as well as through direct debit. An individual needs to tax the vehicle even though he/she doesn’t have to pay anything for the vehicle – this is valid in case of an exempt if an individual is disabled (see below for details).

Also Read : Company Car Tax Table & Mileage Allowance Rates for 2018/19 & 2019/20

Steps for paying tax

• Does an individual have a V11 reminder letter printed in his/her name? Click on either yes or no and proceed.
1. If yes is opted: Only use the 16 digit number mentioned on the V11 reminder letter. The amount stated might differ, as these are printed in advance. This is applicable to new vehicle tax rates which have come into effect starting 1st April. The applicable rate will be same irrespective of the mode of payment such as by phone, online, or at the Post Office.
2. If no is opted: Taxing a vehicle by selecting the following options:
1. I have the V5C Registration certificate (logbook) printed in my name: Use the 11 digit reference number mentioned on the letter.
2. I have the V5C/2 new keeper supplement (green slip).
3. I have the Last Chance Letter printed in my name: Two options available – My letter has a 16 digit reference number or my letter has a 11 digit reference number.
• Taxing a vehicle by phone is somewhat different. The process is automated through a 24/7 service desk-help which usually takes three to four minutes. It must be noted that payment through Direct Debit is not valid for phone transactions. An individual must enter the similar information that he/she would be entering while applying for tax through an online portal via reference number mentioned on either the V11 or V5C and pay the applicable amount via debit/credit. The number to make payment via phone is 0300 123 4321 and number to make payment via text phone is 0300 790 6201 – usual call charges are applicable i.e. calls are charged at the local rate. You can also get a replace of your driving license in case you have lost it.
• On the other hand, individuals can tax their vehicles at a Post Office, however, it is imperative to make sure about the services provided by a specific Post Office as not all still tax vehicles. Documents to carry along include:
1. Completed new keeper supplement (V5C/2), V5C, or V11 reminder.
2. the payment shown on the reminder.
3. MOT test (an annual vehicle test) certificate if required (must be valid when the tax starts).

Vehicles used by a disabled person

An individual can claim disability exemption while applying for vehicle tax and they can even remove an exemption from a vehicle in case they are no longer being operated by a disabled person.

• Vehicles for Disabled passenger: Such vehicles comprise of means of transportation (other than ambulances) used by companies to provide transport services to disabled people are exempt.
• Powered wheel chairs, mobility scooters, and invalid carriages: In order to be exempt, these vehicles must have an all-out speed of 8mph on the road, and must be fitted to a device restricting them to 4mph on footways.
• Historic vehicles: Vehicles made prior to 1 January 1978 fall under the exemption category starting 1 April 2018.
• Steam vehicles: No tax is payable on steam vehicles.

About the author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.