New ‘luxury’ VED charge headache for used car sales

  06 February 2017

The £310 supplement for new cars with a list price of £40,000 or more will apply sooner if the vehicle is sold less than 12 months after it is registered.

Due to take effect in April, the new VED scheme requires the car’s first owner to make a supplementary £310 payment a year after its first registration date for five years. However, the charge becomes payable immediately if it is sold within the first 12 months.

Speaking to Auto Retail Agenda, Philip Nothard, retail and consumer editor at CAP’s Black Book, said: “We found out yesterday [30 January] that if that vehicle changes hands within the first 12 months, the second owner immediately pays the [£310] supplement.”

He added that the change could cause confusion, as it would be difficult for vendors and owners to keep on top of the extra payment date.

“So what you’ll have in, say, in two years’ time when you’re selling it as a used car, is ‘when is the anniversary of that £310 supplement?’ The anniversary will be determined by whether or not [the vehicle] has had a change of owner in its first 12 months; if it hasn’t, then [the £310 payment] is just every 12 months [for five years], but if it does, then that payment is due on the anniversary of that change of owner.”

A spokesman for the DVLA confirmed that this was the case, and that the V5 would be amended to reflect the new payment date of the supplementary charge when the vehicle is sold.

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