Starting from Monday, April 1, the rates of Vehicle Excise Duty (VED), commonly called road tax, is set to rise meaning drivers could pay up to £600-a-year.
The DVLA confirmed that payments for most diesel, petrol or hybrid drivers may increase by the RPI rate of inflation – likely around 6 per cent.
But certain cars will be hit much harder than others with luxury motors being at the top of the list.
Tax expert Andy Wood, of Tax Natives, provided a further breakdown of what these extra costs could look like.
He said: “The impending rise in VED rates will substantially impact drivers of petrol, diesel, and hybrid vehicles across the UK.
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“Individuals relying on traditional fuel types may need to allocate additional funds to their vehicle taxes, potentially amounting to hundreds of pounds.
“Vehicle taxation costs vary based on age and environmental impact.”
Bradley Post, Managing Director of finance experts RIFT warned the more expensive your car is the higher the tax could be.
He told Express.co.uk: “The average motorist can expect to see a six percent rise which will cost them roughly £10 more per year.
“However, for those whose cars are classed as luxury and subject to the ‘luxury car’ surcharge, this cost is likely to rise to over £400, which will see them pay as much as £600 a year in road tax.”
This additional Expensive Car Supplement, paid for five years on cars worth over £40,000, is rising from £390 to £410.
The UK operates three systems of VED, depending on when your vehicle was registered.
The newest system – introduced in 2017 – is then split into two further rates.
One for your first year on the road based on emissions and then a second based on the cost of the car after the first 12 months.
Higher polluting motors could see the first-year rate rise up to £2,745 – a sizeable increase of £140 on last year.
The second rate is set to remain the same, with a flat rate of £190 (or £180 for “alternative fuel vehicles”).
Motors registered between 2001 and 2017 are taxed based purely on emissions.
From April, the most polluting cars will see their rate rise from £695 to £735, while lower bands could see a spike of between £20 and £35.
Then, for cars registered before 2001, the tax is based on engine size.
Cars under 1549cc will now be charged a flat rate of £200, while larger engines will incur a £325 payment.
Fortunately, there are five key exemptions which could see thousands of Brits pay no tax at all.
Five major VED exemptions
- Low and no-emission vehicles – those emitting less than 100g/km of carbon dioxide registered before 2017
- Historic vehicles – those which are more than 40 years old on a rolling basis
- Vehicles used by disabled people – if you qualify for the higher rate of major disability benefits including Disability Living Allowance, Personal Independence Payment or Child Disability Payment
- Vehicles used for agriculture, horticulture and forestry – including tractors
- Vehicles registered Statutory Off Road Notification (SORN)