Any VED experts?

[Mark V GTD]

Trying to figure out how this works...

I bought a new Audi A5 last year which was over £40k new so attracted the dreaded luxury car 'tax'.

I sold the car recently with seven full months of tax remaining and just received a refund of only £134.

I don't know for certain what VED was originally paid (finance papers just mention total price of car) but an line site suggests it would have been £165 plus £355 (the latter being the luxury supplement).

Is it the case that you don't get the remaining part of the supplement back when you sell or SORN? I assume the next owner has to pay it so are HMG getting it twice?

Would appreciate an explanation if anyone has one please.

[sixor8]

Isn't the first year tax different to subsequent years + 'luxury' tax? The full rates are here:

https://assets.publishing.service.gov.uk/governmen...

[Mark V GTD]

Thanks for that - the VED would have been £230/12 months - so the refund reflects that. But what about the luxury tax extra - do I not get a refund on part of that?

Hang on - it says that the 'additional rate' (luxury car supplement) is due from the second year. So does that mean in the first year I only paid £230?

Edited by Mark V GTD on Friday 3rd March 17:17

[sixor8]

That's right. The first year rate is variable depending on emission of CO2. After the first year it is a flat rate of £165 plus the 'luxury' £40k plus rate if applicable.

However, if you keep a car less than 12 months, the second owner has to pay it which is why it is phrased as 'second licence,' not 2nd year. You should have had the VED on the invoice if you bought it new, there is no refund applicable.

[Mark V GTD]

I never got an invoice as such - just finance papers which only referenced the total cost of the car - hence me not knowing what was paid in VED.

Thats quite a revelation - so the whole luxury car tax thing is only levied from the second time the car is taxed. Who came up with that idea?

So people who keep a new 'luxury car' less than a year never pay it?

Edited by Mark V GTD on Friday 3rd March 18:13

[SL22]

Mark V GTD said:

I never got an invoice as such - just finance papers which only referenced the total cost of the car - hence me not knowing what was paid in VED.

Thats quite a revelation - so the whole luxury car tax thing is only levied from the second time the car is taxed. Who came up with that idea?

So people who keep a new 'luxury car' less than a year never pay it?

Not quite. The first year VED is specific to the emissions, so some people will pay over £2000 for their ‘first year tax’ - see: https://www.gov.uk/vehicle-tax-rate-tables

But this is all rolled into their new car price. Side note that for example if you spec a car on the Porsche site it doesn’t include the tax…so you can add the few thousand on for some of their ‘cheapest’ cars, which does come as a surprise to some.

[Mark V GTD]

SL22 said:

Not quite.

But the £2k or whatnot is normal VED and not 'luxury car tax' in the first year, right?

[SuperPav]

1st year VED (which you pay at registration) is not subject to the luxury "premium" tax supplement.

[Mark V GTD]

Thanks all for clearing this up for me!