Just got this email which answers my question and it may help others.
From the 1st October 2014, the keeper of the vehicle will no longer need to apply for a refund.
A refund will be issued automatically to the current or previous keeper when the DVLA have been notified of a change to the vehicle record.
The following notifications will issue a refund:
•vehicle has been sold or transferred
•vehicle has been scrapped at an Authorised Treatment Facility
•vehicle has been exported
•vehicle has been removed from the road and a Statutory Off Road Notification (SORN) has been made
•change of tax class on the vehicle to an exempt duty tax class
DVLA will issue a refund for any complete remaining months of your vehicle tax by post within 6 weeks (if applicable).
To notify that your vehicle has been sold, transferred or exported you should complete and return the relevant part of the V5C Registration Certificate. If you do not have the V5C you should write to DVLA, Swansea, SA99 1BA. The letter should include:
• vehicle registration number
• date of sale
• who the vehicle has been sold to
To make a SORN you can apply online at www.gov.uk/make-a-sorn
using your V5C registration certificate. Alternatively you can complete and send form V890, which is available at www.gov.uk/make-a-sorn
This is a system generated response to your email enquiry. Do not reply to this email. If you wish to contact us again about this response then please use our Reply Form or copy and paste the following URL in to your browser:
If you have an additional enquiry then please use the appropriate form by clicking here or by copying and pasting the following URL into your browser:
When filling in the reply form the email reference number 2468891 will be required.
Further information can also be found at www.gov.uk/browse/driving
DVLA Contact Centre