Does Luxury Tax expire after 5 years even if SORNed during?
Discussion
Sheets Tabuer said:
five years after it was first taxed, don't think it matters if it has been sorn'd
Careful as wording is everything. From the Gov website - You only have to pay this rate for 5 years (from the second time the vehicle is taxed).Owner is liable for the tax up to and including year 6 - so in this case I would suggest that's 2023. In 2024 it reverts to normal cost.
I’ve just checked my V5, the date on it says rip off tax is due until March 2024. The car was new in September 2018 but I bought it used from a Audi dealer in March 2019 so I would be the second person to have taxed it and the 2024 date would be 5 years from when I bought it.
So it doesn’t look like 5 years from when it was first registered, potentially it will be 6 years.
So it doesn’t look like 5 years from when it was first registered, potentially it will be 6 years.
RammyMP said:
I’ve just checked my V5, the date on it says rip off tax is due until March 2024. The car was new in September 2018 but I bought it used from a Audi dealer in March 2019 so I would be the second person to have taxed it and the 2024 date would be 5 years from when I bought it.
So it doesn’t look like 5 years from when it was first registered, potentially it will be 6 years.
If it makes you feel any better you're still paying less than me. Mine comes under the old system of emissions rated and last year it cost £565 So it doesn’t look like 5 years from when it was first registered, potentially it will be 6 years.
Owned it for nearly 11 years and I've paid way more in road tax than I have in servicing and repairs!
If you're both tight and savvy....
When you buy the car new, cash the tax in during its first month.
Retax it the same day.
You'll then only pay for 5 years instead of 6.
My brother has a newer car than me, but it was an ex demo (with all of 27 miles on the clock when he bought it!) which was untaxed whilst being in the showroom. I can only assume it was registered to gain a manufacturer bonus. His tax surcharge ends before mine does.
When you buy the car new, cash the tax in during its first month.
Retax it the same day.
You'll then only pay for 5 years instead of 6.
My brother has a newer car than me, but it was an ex demo (with all of 27 miles on the clock when he bought it!) which was untaxed whilst being in the showroom. I can only assume it was registered to gain a manufacturer bonus. His tax surcharge ends before mine does.
Interesting, but you'll pay for 2 months VED that way (only complete months are refunded).
Is it possible? When you declare a car SORN you can't then buy it online for a few days. Meaning a trip to a Post Office.
I'd suggest declaring it SORN on the last day of the month, and buying again on the 1st of the next month.
Is it possible? When you declare a car SORN you can't then buy it online for a few days. Meaning a trip to a Post Office.
I'd suggest declaring it SORN on the last day of the month, and buying again on the 1st of the next month.
Edited by sixor8 on Sunday 21st February 18:15
RammyMP said:
I’ve just checked my V5, the date on it says rip off tax is due until March 2024.
I pay the extra tax on my car too, over £40K when new in Sept 2017. I bought it at 6 months old for under £40K. But, it's not a rip off. It's transparent, no one is trying to hide anything, and I knew what I was taking on when I bought the car. No one has conned me or ripped me off. TwigtheWonderkid said:
RammyMP said:
I’ve just checked my V5, the date on it says rip off tax is due until March 2024.
I pay the extra tax on my car too, over £40K when new in Sept 2017. I bought it at 6 months old for under £40K. But, it's not a rip off. It's transparent, no one is trying to hide anything, and I knew what I was taking on when I bought the car. No one has conned me or ripped me off. AlwynMike said:
If you're both tight and savvy....
When you buy the car new, cash the tax in during its first month.
Retax it the same day.
You'll then only pay for 5 years instead of 6.
My brother has a newer car than me, but it was an ex demo (with all of 27 miles on the clock when he bought it!) which was untaxed whilst being in the showroom. I can only assume it was registered to gain a manufacturer bonus. His tax surcharge ends before mine does.
Sounds like it was sat in the showroom for a while.When you buy the car new, cash the tax in during its first month.
Retax it the same day.
You'll then only pay for 5 years instead of 6.
My brother has a newer car than me, but it was an ex demo (with all of 27 miles on the clock when he bought it!) which was untaxed whilst being in the showroom. I can only assume it was registered to gain a manufacturer bonus. His tax surcharge ends before mine does.
No matter how you try and trick the system its valid for 6 years after the car is registered.
From dvla
If your new car’s price exceeds £40,000, you will also need to pay an extra £325 for years two to six (i.e. the five years after your first year tax runs out).
Edited by tedblog on Sunday 21st February 22:37
tedblog said:
Sounds like it was sat in the showroom for a while.
No matter how you try and trick the system its valid for 6 years after the car is registered.
From dvla
If your new car’s price exceeds £40,000, you will also need to pay an extra £325 for years two to six (i.e. the five years after your first year tax runs out).
No, mine runs out when the cars 5 1/2 years old, I bought it 6 months old so when I taxed it it was the 2nd time it was taxed.No matter how you try and trick the system its valid for 6 years after the car is registered.
From dvla
If your new car’s price exceeds £40,000, you will also need to pay an extra £325 for years two to six (i.e. the five years after your first year tax runs out).
Edited by tedblog on Sunday 21st February 22:37
RammyMP said:
TwigtheWonderkid said:
RammyMP said:
I’ve just checked my V5, the date on it says rip off tax is due until March 2024.
I pay the extra tax on my car too, over £40K when new in Sept 2017. I bought it at 6 months old for under £40K. But, it's not a rip off. It's transparent, no one is trying to hide anything, and I knew what I was taking on when I bought the car. No one has conned me or ripped me off. I do of course realise it's all a paper exercise and no doubt price negotiations when buying would factor in the tax increases - or at least they would if I was the customer.
tedblog said:
RammyMP said:
No, mine runs out when the cars 5 1/2 years old, I bought it 6 months old so when I taxed it it was the 2nd time it was taxed.
The dvla info wrong , fair play 
The treasury are always looking at ways of getting revenue. Quite often it is to replace tax revenue lost from other sources. Tobacco tax is dropping so they recoup it elsewhere. Motoring is an easy target, a huge cash cow.
Basically extra tax on higher value items that people with the means to buy them is one way of not increasing taxes on people with lower incomes. A bit like income tax. Higher rates as your income increases. In some cases a double whammy effect as with petrol. Basic price + fuel duty then vat on both. Tax on a tax.
As with most taxes there are often ways to mitigate how much you pay.
As EV numbers increase and ICE numbers reduce the tax incentives will change. VED, electricity taxed to replace lost fuel taxes, pay per mile increasing. It is like the falling away of solar power feed in tariffs. Good to entice people in the early days but lowered as time went on.
So, you want a car costing > £40k then you are a target as you are deemed likely to be able to afford it. It looks good as politicians see it as not taxing lower earners.
One thing to watch for is the £40k target. Cars are getting more expensive so more will fall liable. Will this £40k increase?
Treasury income models will be looked at to suggest tax mods to increase revenue due to the Covid cost recoup.
We need to brace ourselves!
Basically extra tax on higher value items that people with the means to buy them is one way of not increasing taxes on people with lower incomes. A bit like income tax. Higher rates as your income increases. In some cases a double whammy effect as with petrol. Basic price + fuel duty then vat on both. Tax on a tax.
As with most taxes there are often ways to mitigate how much you pay.
As EV numbers increase and ICE numbers reduce the tax incentives will change. VED, electricity taxed to replace lost fuel taxes, pay per mile increasing. It is like the falling away of solar power feed in tariffs. Good to entice people in the early days but lowered as time went on.
So, you want a car costing > £40k then you are a target as you are deemed likely to be able to afford it. It looks good as politicians see it as not taxing lower earners.
One thing to watch for is the £40k target. Cars are getting more expensive so more will fall liable. Will this £40k increase?
Treasury income models will be looked at to suggest tax mods to increase revenue due to the Covid cost recoup.
We need to brace ourselves!
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