Claim Your Refund

During the first few months of 2001 the Government will be paying back around £300 million to motorists who own cars with engines between 1201cc and 1549cc. If your car is within that range you should get a letter from the Driver and Vehicle Licensing Agency (DVLA) inviting you to claim the money. Most people will get £55, but some will receive £82.50 and others just £27.50. Whatever the amount, if you do not send this letter back then you will not get your payment.

The money is a rebate on the Vehicle Excise Duty (VED) which we all pay when we go to the Post Office to tax our cars. Currently the full rate is £160 a year. But in 1999 the Chancellor introduced a lower rate for smaller cars with engines up to 1100cc. The reduced rate is £55 less than the full rate so is now £105 for the year. In successive Budgets Gordon Brown has extended the reduced rate to bigger cars and has backdated the changes, leading to a complicated variety of dates and rates. In addition, an entirely new way of taxing vehicles began this year. Vehicles first registered from March 1 2001 – those with a ‘Y’ at the start of the their number – are taxed in four bands related not to engine size but to how much carbon dioxide they emit.

Who gets a rebate?
There are two rebate schemes. The first is for vehicles with engines from 1101cc to 1200cc. Form March 1 2001 it will cost £105 to tax these cars for a year. But when the change was announced in the Budget in March 2000, it was backdated for a year. So anyone who has taxed a vehicle of 1101cc-1200cc between March 2000 and February 2001 is due a rebate of the difference. If you licensed it for a year you will get £55, the difference between the full rate and the reduced rate. If you took out a six-month licence, then the position is more complicated. If you took out just one six-month licence in that time then you will get back £27.50. But some people may have taken out two six-month licences in that time – say one in May and one in November – and they will get two lots of £27.50, a total of £55. And people who took out one six-month licence and then a 12- month one in that period, will get back £55 and £27.50, a total of £82.50.

If you do not send back the letter you will not get the money. Normally it is sent to you as a cheque and has to be paid into a bank account. However, if you do not have a bank account then you can write across the form that you want it as a postal order which you can cash at the post office.

These letters should have gone out in March. If you have not sent it back then the sooner you do, the quicker you will get the money – the DVLA says it should take about four weeks.

The second rebate is for people with slightly bigger vehicles, 1201cc up to 1549cc. The Chancellor announced in the Budget this year that these vehicles would only be charged the lower rate of VED from July 1 2001. Anyone buying a tax disc for a vehicle of this size from July 1 will pay £105 instead of £160. But Gordon Brown also announced that this change would be backdated to 1 November 2000. So anyone with a vehicle which was taxed between November 2000 and June 2001 will get a rebate on the tax they have paid. They will be sent a letter in July or August inviting them to claim a refund. The amounts are £55 on a full year’s licence and £27.50 on a six month licence. If you took out two licences in that period you will get two payments. These forms, which are still being designed, may allow you to tick a box if you want the payment made by a postal order rather than a cheque.

Some people do not get a refund at all. If your licence started

· February 2000 or earlier for vehicles 1101-1200cc

· October 2000 or earlier for vehicles 1201-1549cc

no refund is due.

If your licence expired

· February 28 2001 or earlier for vehicles 1101-1200cc

· June 30 2001 or earlier for vehicle 1201-1549cc

then the person who owned it when it expired will get the refund. If the licence expires after that, then the person who owns the vehicle on those dates will get the refund.

So it is possible that the person getting the refund is not the person who paid for the licence. For example, if you have sold your vehicle, then the person who now owns it may get the refund not you. Similarly if you have bought a vehicle which was taxed, you may get the refund not the person who taxed it.

If your vehicle is between 1101cc and 1200cc you should have been sent a letter offering a rebate in March. If your vehicle is 1200cc-1375cc you should get a letter in July and if it is 1375cc-1549cc then you should get a letter in August. If you have moved and the DVLA does not know your new address, tell them – you should do that anyway. Once you send it back your payment should arrive within about four weeks. If you have not had a letter and think you should get one – or if you have had it and lost it – or with any other problems or queries call the Driver and Vehicle Licensing Agency on 0870 241 2449. They also have an email address vehicles.dvla@gtnet.gov.uk

Graduated VED
There is a new system of taxation for cars which were first registered from March 2001. The rate of duty depends not on engine size but on how much carbon dioxide, CO₂, the vehicle emits. There are four bands - £100 for those that pollute the least, then £120, £140, and £155 for the worst polluters. Each new vehicle model is tested and assigned to one of the four bands. The rate of duty then lasts for the life of the vehicle – its CO₂ emissions are for the model not the individual vehicle. Cars are not tested individually for CO₂ emissions. It should not be confused with the carbon monoxide checks done during the MOT annual test.

These new cars are ‘Y’ registrations. And they are the last of the familiar car numbers with a letter showing the date of registration. From September 1 a new system starts which will show the registration period in numbers – 51 means September 2001, then 02 for March 2002, 52 for September 2002 and so on. It will also contain a two letter code to show the part of Britain in which the car was first registered. Full details are on the DVLA website www.dvla.gov.uk

PENSIONS 
Two months ago I wrote about state retirement pension. But there are still things that are puzzling many readers. Many married women have written to me saying they feel cheated out of the state pension they have paid for themselves in work. The problem is, a married woman can get a retirement pension in two ways – but she can only get it once. She can get a pension either

· on her own full national insurance contributions, or

· on the contributions paid by her husband

but she cannot get them both. The result is that the contributions a married woman paid at work may seem to be wasted.

For example, Betty Gallagher worked from the age of 16 until she married at 25. For those nine years she paid full contributions. She started work again at 45, when her children were grown up. And by then she had to pay full national insurance contributions. Altogether she paid 23 years of contributions and earned a 59% pension - of £42.78 a week. She claimed that pension at 60. A year later her husband Liam reached 65 and claimed his pension. She could then claim a pension of £43.40 on his contributions. So her own 23 years of contributions just bought her one year more pension than she could have got anyway. If Liam had been older than that and reached 65 before she reached 60, she would have gained nothing.

Similar problems apply to widows. They can get a full pension on their late husband’s contributions whether they have paid any National Insurance contributions or not. So widows who have paid contributions feel cheated. One reader, Mrs Y from Sussex, wrote "should the lady become a widow she basically loses the contributions she has paid....if instead of paying the full national insurance that money had been invested then she would now have a lump-sum and interest at her disposal."

Sadly, that is how the system works. It certainly does not seem fair, but it is the law. These rules apply to the basic state retirement pension. On top of the basic pension any graduated pension or SERPS which a woman has paid for are paid on top of the basic pension – whether she claims it on her own or her husband’s contributions.

May 2001

e-mail Paul Lewis on paul@paullewis.co.uk