Refunds of vehicle excise duty: correct use of V14

The 2008 Finance Act introduced new rules concerning refunds

of vehicle excise duty (VED) from 1 January 2009. Refunds are payable only to registered vehicle keepers and only in limited circumstances such as a change of keeper, a SORN (Statutory Off Road Notification) declaration or if the vehicle is scrapped or exported.

The Driver and Vehicle Licensing Agency (DVLA) has received several applications from hgv operators who wish to move into a lower tax band (for example through voluntary downplating) or into the reduced pollution tax class. As this scenario does not meet one of the legal criteria for the payment of refunds, the applications have been rejected.

The correct procedure in these circumstances is to apply using form V70 to exchange the licence for a new one at the lower rate. Instead, some operators surrender the current licence for a refund using form V14 and re-license. While the refund/re-licensing procedure was not intended for the situation where an operator moves to a lower rate of VED, DVLA has accepted it in the past and paid the refunds. However, the legislation introduced on 1 January precludes it from continuing to do so.

Failure to use the V70 procedure is already causing operators inconvenience, as the initial refund application will be rejected and the operator will need to contact DVLA to seek redress.

DVLA is proposing to maintain the policy of reimbursement until the end of August 2009, after which it will review the position.