Double Tax & Clamped Cars: What you need to know

New legislation ensures unused tax cannot be passed onto new owners of a vehicle. Some families forced to pay double road tax. Double tax and Clamped cars - what you need to know

Drivers in the UK are being forced to pay an additional £38million in taxes after the newly introduced electronic tax system starts to clamp down on unused tax being sold with a car. If you have recently purchased a car with a couple of months of unused tax, you might think you're safe - but you're not.

The number of cars clamped due to having no tax has sky-rocketed since the introduction of electronic road tax and this is because the unused tax is being wiped the moment the vehicle is sold. President of the AA, Edmund King has revealed "...the DVLA's clampers are now netting 3,000 more untaxed cars a month than this time last year." The AA also said the increase in clamping makes it a 71% increase since February last year.

What's more, the AA has also heard from families who have had to pay tax twice in one month just to transfer the car to another member of the family and they will be receiving no refund.

double tax clamped cars
71% increase in cars clamped since February last year

With the new legislation in play, when it comes to selling a car, the seller will need to inform the DVLA that the vehicle has changed hands and the tax has been cancelled with any remaining full months being refunded. It is then up to the new owner to immediately tax the vehicle on the day of the purchase. However, regardless of whether the buyer purchased the vehicle right at the end of the month, they are required to pay tax from the 1st of that month or face the clamp and fines.

Specifically, if a vehicle is clamped due to lack of tax, a fee of £100 must be paid to have it released. The owner will then be charged a further £160 unless they can prove that the vehicle has been taxed within 2 weeks of the clamp. If the vehicle is not released within 24 hours, it will be impounded and the release fee increased to £200. The owner will be charged and additional £21 for every day that the vehicle is held in storage.

This comes as unsettling news to many people in the UK who have had no reason to suspect their vehicle should in fact be "SORN'd". In fact a recent AA survey actually found that 51% of people had no idea that you could no longer pass on unused tax.

It also means buyers must be warned that if a vehicle is advertised as "taxed until Jan 2016", they need to ignore this. It's no longer a selling point as they will need to tax the vehicle themselves immediately after purchase.

Buyers and sellers alike, remember: Caveat emptor - "Let the buyer beware"

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Sources: ThisIsMoney, Metro, BT