Road tax budget hike and how to make it more palatable (save upto £136.50)

sal_park

(it's a long post, but bare with me !)

Hi, I have a big, relatively thirsty car (Ford Galaxy), and after reading the budget on road tax it seems it will be costing me 440 next year (up from 210). So I think I've worked out a way to offset this pain and save myself around 136.50 quid in car tax over the next 2 years.

Yes it legal
Yes the car will be on the road all this time.

Admittedly my car is probably quite an extreme example give it's a family run around - I wouldn't mind so much if it was something more special

Anyway here is what I plan todo:

Currently my car tax runs out in July 2008. If I renew it then (£210) and then again in July 2009 (£440 ) the cost will be £650 to have road tax until July 2010.

Here is my alternative plan:
1) Apply for new car now (£210**). Yes I will have paid road tax twice for this mouth, but it's only a loss of around 1/12 £210 = £17.5
(info link - apply for road tax online: http://www.direct.gov.uk/en/Motoring/Motoringtransactions/BeforeyouapplyD/DG_10034732 )
(application link: http://www.vehiclelicence.gov.uk/EvlPortalApp/?SKIN=directgov )

2) When the new tax disc arrives (about 5 days) get a refund on your 'old' tax disc.
(info link: http://www.direct.gov.uk/en/Motoring/OwningAVehicle/HowToTaxYourVehicle/DG_10012526 )
(form download link: http://www.direct.gov.uk/prod_consum_dg/idcplg?IdcService=GET_FILE&dID=51688&Rendition=Web (pdf) )
I would suggest sending them recorded, as you need to have it posted by the end of the month. For me this should be about a £70 refund (4 months worth, so 4/12 £210)

3) Next year in March 2009 since you tax runs out before the new rates apply get your next years road tax at the current rate of 210

So if I don't renew until July it will cost me £650 (£210 + £440) for tax until July 2010

If I do renew now it will cost me £513.5 (
+210 cost of road tax 2008-2009
-70 refund from 2007-2008 roadtax
+17.5 lost tax month when you are taxed twice
+210 cost of road tax 2009-2010
+146 cost of road tax March 2010 - July 2010 (so the comparison is fair - 4/12 of £440)

So the total saving is £136.50. Not bad, but if you car is not in the top tax bracket you will get a different discount.


Final point to note is that I think the government want to stop this happening so the have section A.99 in the budget which (I suspect) stops anyone claiming a road tax refund 'because they want claim it' from Jan 1st 2009:

the_budget wrote:

A.99 A measure will be introduced, with effect from 1 January 2009, to define the
circumstances under which a rebate may be paid on the unexpired portion of a registered
vehicle keeper’s licence. (*)

(I don't know what the * in section A.99 above (download the budget from here http://downloads.bbc.co.uk/news/nol/shared/bsp/hi/pdfs/13_03_08bud08_completereport.pdf (4mb pdf) - answers on a postcard)

** 2008/2009 rates apply from13 March 2008, not 1st April 2008 (see budget table A.8a, note 1)

For this to work you'll need to do this before then end of March !

meester

Hi.

I already created a thread on this with a spreadsheet (http://spreadsheets.google.com/pub?key=pQuRzBrJdagGOD3Rizat2Cg) showing savings based on tax expiry date and CO2 emissions.

http://forums.moneysavingexpert.com/showthread.html?t=799041

You can actually save up to £193, depending on the expiry date of your tax.