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Monday, 12 March, 2001, 18:11 GMT
Car tax rate rebate
Vauxhall Astra
Engines less than 1549cc will now be entitled to a rebate
By BBC Radio 4's Money Box programme.

Millions of people who are car owners will soon start to benefit from the reduced rate of car tax.

In the budget it was confirmed that five million more vehicles will fall into the bracket where owners are charged 55 less for road tax each year than those with bigger engine vehicles.

Anyone taxing a car with an engine size up to 1549cc will pay less.

Models in the Ford Escort and Vauxhall Astra ranges, for example, will be taxed for 105 a year, or 57.75 for a six month period.

DVLA logo
The Driver and Vehicle Licensing Agency will send out forms for a rebate.

The Chancellor had previously announced that cars under 1200cc would also be taxed at the lower rate and this will all be backdated to November last year.

Details on just how refunds will be paid were not included in any of the main budget detail but Moneybox has found out how it will work.

Anyone whose car has an engine size of between 1100 and 1200cc will be sent a form in March inviting them to apply for a rebate.

This form will have to be filled in and returned to the Driver and Vehicle Licensing Agency and only then will the DVLA send out a cheque; 55 to those who have already taxed vehicles for a year or 27.50 to those who took the six month option.

This form is the sole offer of money back, and it is the only way you can claim that money.

For owners of vehicles up to1400cc the wait will be slightly longer, as with anyone taxing a car with an engine between 1201cc and 1549cc.

Rebate letters will not be sent out to these car owners until July or August, again a form will have to be sent back in order to receive a cheque.

A credit on overpaid car tax cannot be given at the post office counter at the time of retaxing.

At present, owners of cars with engine sizes between 1201cc and 1549cc still have to pay the higher car tax rates until July 1.

Only after July 1 is it allowable to pay the reduced rates.

So if owners are retaxing in the next three months they will still need to go through the trouble of claiming a rebate.

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12 Mar 01 | Talking Point
What do you think of the Budget?
07 Mar 01 | Budget 2001
The Budget: Expert views
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