Car Tax When Selling a Car UK 2026: How to Notify DVLA

Selling a car in the United Kingdom involves a coordinated set of Driver and Vehicle Licensing Agency notifications that ensure Vehicle Excise Duty is correctly cancelled on the seller's side, refunded for full unused months, and re-taxed by the buyer before the vehicle is driven, per gov.uk/sold-bought-vehicle. The seller's primary task is the prompt online notification through the gov.uk portal using the V5C logbook reference number, which simultaneously cancels the existing VED, triggers the refund process, and updates the registered keeper status. The seller hands the buyer the V5C/2 green slip (the new keeper supplement) which carries the necessary reference for the buyer to tax the vehicle, while retaining the main V5C body for the seller's records. The buyer must tax the vehicle before driving on a public road, typically using the V5C/2 reference at gov.uk/vehicle-tax. VED does not transfer between keepers under the post-2014 framework that ended tax disc transferability. Sellers who fail to notify DVLA remain on the registered keeper record and can be held liable for penalties, fines, and ongoing VED until the notification is processed.

How does the seller notify DVLA?

The fastest method is the online process at gov.uk/sold-bought-vehicle, requiring the V5C reference number, the buyer's name and address, and the date of sale. The system confirms the notification within minutes and sends an automatic email confirmation. The change is processed immediately by DVLA, terminating the seller's registered keeper status from the date of sale.

Sellers without internet access can post the V5C with the sale section completed to DVLA, Swansea, SA99 1BD. Postal notification typically takes 4 to 6 weeks to process, during which the seller technically remains the registered keeper and is at risk of penalties for any offences attributed to the vehicle. Online notification is therefore the strongly preferable option for any seller with internet access.

What is the V5C/2 green slip?

The V5C/2 is the new keeper supplement detached from the main V5C logbook, containing the reference number the buyer needs to tax the vehicle in their name at gov.uk/vehicle-tax. It is a small green section at the bottom of the V5C and forms the buyer's only documentary proof of ownership until DVLA issues their full V5C in 4 to 6 weeks.

Sellers must hand the V5C/2 to the buyer at the point of sale and keep the rest of the V5C for their own records. The seller's V5C copy is no longer valid as proof of ownership once notified, but is useful evidence in any later dispute about the date of transfer. The buyer's full V5C arrives by post directly from DVLA after the change is processed, with no further fee.

What VED refund does the seller receive?

DVLA refunds the seller for any full calendar months of VED remaining on the day of sale, per gov.uk/sold-bought-vehicle. Partial months are not refunded; a sale on the 15th of a month produces a refund covering the next full month onwards. To maximise the refund, sellers can time the formal notification for the start of a month, though this is rarely worth delaying a buyer.

The refund is sent by cheque to the registered keeper's address on the V5C within 6 weeks. Sellers who have moved house should update the V5C address before notifying DVLA of the sale, otherwise the refund cheque will be sent to the old address. Direct Debit payers have remaining DD payments cancelled rather than receiving a cheque.

What does the buyer have to do?

The buyer must tax the vehicle before driving on a public road, using the V5C/2 reference at gov.uk/vehicle-tax. Driving an untaxed vehicle is an offence under the Vehicle Excise and Registration Act 1994, and DVLA Automatic Number Plate Recognition cameras detect untaxed vehicles in real time. The first month of tax is paid in full regardless of the day in the month the buyer takes possession.

The buyer also needs valid insurance in force from the moment of taking possession, and a valid MOT (where required) to drive on a public road. Modern dealer practice is to confirm tax payment, insurance, and MOT status before releasing keys; private sales rely on buyer responsibility, with sellers occasionally noting these checks in the sale receipt.

What happens if the seller doesn't notify DVLA?

The seller remains on the DVLA registered keeper record and can be held liable for any tax, fines, parking penalties, or speeding tickets attributed to the vehicle after the sale, until the notification is processed. DVLA can issue an out-of-court settlement of up to £1,000 for failure to notify, per gov.uk DVLA enforcement guidance.

Sellers who realise late that they did not notify DVLA should submit the notification immediately and retain documentation showing the actual date of sale. Where the buyer's identity is known, sellers can provide that information to DVLA to expedite the keeper change. Where the buyer's identity is unknown, the seller may need to argue the date of sale based on receipts, bank transfers, or other evidence.

How do private and trade sales differ?

In trade-in transactions to franchised dealers, the dealer typically handles the DVLA notification on behalf of the seller as part of the standard administrative wrap-up. Sellers should confirm explicitly that the dealer has submitted the notification and obtain confirmation in writing, because dealer-side delays can leave the seller exposed to keeper liability for several days or weeks.

What DVLA data is published on keeper changes?

The Department for Transport publishes Vehicle Licensing Statistics on gov.uk that include keeper change volumes alongside annual VED revenue figures. Several million keeper changes are processed each year, with the vast majority handled through online notification. Postal notifications have declined steadily as broadband access has grown, with online now the dominant channel.

DVLA enforcement statistics show that out-of-court settlements for failure to notify keeper changes account for a meaningful share of annual penalty income, alongside untaxed-vehicle penalties. Both categories are aggregated in the annual DVLA Annual Report and Accounts published on gov.uk, with the most recent year's figures available for any seller checking the live policy environment.

Recordkeeping discipline pays off in disputed-sale cases. A signed bill of sale, photographs of the vehicle and its mileage at handover, the bank receipt of cleared funds, and an email confirming the buyer's address together produce a robust evidence pack that DVLA accepts to back-date a keeper change where the sale was real but notification was delayed. Buyers who later try to deny ownership in connection with parking charges or speeding tickets can be cross-referenced through these records, protecting the original seller from continuing keeper-related liability.

Frequently asked questions

Does VED transfer to the buyer?

No. Since October 2014 VED has not been transferable between keepers. The seller's tax is cancelled and the buyer must tax the vehicle in their own name before driving.

Can the buyer drive home untaxed?

No. The vehicle must be taxed before driving. Buyers can tax online instantly at gov.uk/vehicle-tax using the V5C/2 reference, including from a phone at the point of collection.

When does the refund cheque arrive?

Within 6 weeks of the keeper change taking effect, posted to the seller's address on the V5C. Sellers who have moved should update the V5C address before notifying the sale.

What if I lose the V5C/2 before sale?

Apply for a replacement V5C at £25 via gov.uk before completing the sale, or use form V62 to allow the buyer to apply for one in their own name; this delays the keeper change.

Can I sell a SORN car?

Yes. Notify DVLA of the sale using the standard process. The buyer can collect using a flat-bed transporter, or tax the vehicle before driving away if the MOT and insurance are also in place.

Should I keep proof of sale?

Yes. A signed bill of sale or receipt with the date, buyer details, vehicle details, and sale price protects the seller in any later dispute about the date of keeper transfer.

Does private plate transfer affect notification?

If the seller is keeping a private plate, transfer it off the vehicle before sale using form V317. Selling without retaining the plate first transfers the plate to the buyer.

Sources

• DVLA, Selling, transferring or scrapping your vehicle, gov.uk/sold-bought-vehicle — accessed April 2026.
• DVLA, Tax your vehicle, gov.uk/vehicle-tax — accessed April 2026.
• DVLA, Cancel your vehicle tax, gov.uk/cancel-vehicle-tax — accessed April 2026.
• DVLA, V5C logbook guidance, gov.uk/log-book-v5c-for-vehicles — accessed April 2026.
• Vehicle Excise and Registration Act 1994, legislation.gov.uk — statutory basis.
• DVLA, Annual Report and Accounts, gov.uk — keeper change volume data.
• Department for Transport, Vehicle Licensing Statistics quarterly, gov.uk — accessed April 2026.

Related reading on kaeltripton.com: How to tax a car, DVLA refund timing 2026, How to SORN 2026.