Can I cancel my car tax during the coronavirus pandemic?

The coronavirus pandemic has had a number of knock-on effects, aside from the obvious health implications. Many people now have reduced incomes as a result of being furloughed, losing their jobs, or having less work available to them.

Therefore, finding ways to cut costs has become very important. With most people massively reducing their car use right now, we've put together a guide to explain whether cancelling your car tax is a good idea.

The amount of tax you pay varies massively depending on the type of car and when it was first registered, and with many people now paying for it monthly, it could prove to be a good chunk of savings from your budget.

Can I cancel my car tax?

The good news here is that you can cancel your car tax and even get your money back for days you've paid for but not used.

What's the catch?

There's always a catch, isn't there? If you want to cancel your car tax but not sell your car, you'll need to declare that it's no longer on the road. That means you'll have to store it on a driveway or in a garage, because leaving it parked on the road runs the risk of receiving a fine.

How do I declare it off the road?

You'll need to get a statutory off road notice, known as a SORN. You can do this online at gov.uk/make-a-sorn or by phone on 0300 123 4321 (call charges apply for landlines and mobiles – check with your provider), or by post – you'll need to complete and send application form V890 to DVLA, Swansea, SA99 1AR.

You'll need the V5C, which will need to have your correct name and address on it, or a V11 reminder form if you've been sent one.

What if I don't have my V5C or V11?

Unfortunately, this is problematic because they're required to declare a vehicle SORN. You could try calling the DVLA for help and hope they have a solution in these exceptional circumstances.

How do I get my money back?

When you declare your vehicle SORN, if you have any full months of car tax paid for, they will be refunded. For example, if you paid for six months upfront and you still have three months remaining, you will be refunded the equivalent of three months' tax.

Can I defer payments?

This is not an option – you have to either pay your tax or declare your vehicle off the road.

How does it affect my insurance?

Speaking to Car Dealer magazine, the Association of British Insurers said: "It is a legal requirement to have your car taxed unless you register your vehicle off the road and apply for a SORN. Different insurers have different processes for these situations. If you want to keep your car but won't drive it for a while, contact your insurance provider to see how they can support you."