Drivers are being warned about Vehicle Excise Duty (VED), also know as road car tax, which will rise in price for the majority of motorists.
Car tax increased from April 1 and many people now face paying more to be on the road as cost of living prices rise.
On top of the energy cap going up by 54 per cent, council tax increases, high fuel prices and National Insurance rates rising, drivers will also have to pay for car tax.
VED is calculated using the vehicle’s age and CO2 emissions, with bigger, older engines usually producing more CO2, resulting in higher costs.
The duty has gone up in line with the Retail Price Index measure of inflation, but people with more environmentally friendly vehicles will see smaller rises.
Drivers with higher levels of emissions will see the same increase in the standard rate, but will pay a higher first year rate which increases in increments parallel with emissions.
However electric vehicle owners will still pay no VED, meaning their use of roads in the UK is subsidised by other taxpayers.
Car tax is made up of two payments which drivers are required to pay: standard rate and first year rate.
The first year rate is also known as a “showroom tax” and is based on the CO2 figures when the vehicle was built.
The standard rate is the annual renewal a driver will pay annually from there onwards.
The 2018 Budget outlined that new diesel vehicles registered after April 1, 2018, that do not meet the real driving emission step 2 (RDE2) standard will be charged a supplement on their first year rate to the effect of moving up by one VED band.
Owners of brand new cars that produce 0 grams of carbon dioxide (CO2) emissions and have a price of less than £40,000 don't pay any Vehicle Excise Duty.
Owners of a car registered between 1 March 2001 and before 1 April 2017 that produces up to 100 grams of CO2 per kilometre driven don't pay it either.
The same applies to anyone who owns an ‘historic’ vehicle that’s given classic status after reaching 40 years old.
Those with a disability might be entitled to free car tax if they have an invalid carriage, such as a mobility scooter, receive War Pensioners’ Mobility Supplement or receive the Enhanced Mobility Component of Personal Independence Payment.
Cars with a list price of over £40,000 when new pay an additional rate of £355 per year on top of the standard rate, for five years.
Alternative fuelled vehicles, including hybrids, bioethanol and liquid petroleum gas, pay £155 per annum.
Vehicles producing between 76g and 90g of CO2 emissions per km will see a first-year rate rise from £115 to £120.
Vehicles which produce over 255g of CO2 emissions per kilometre travelled will see their first-year rate rise from £2,245 to £2,365.
The Driver and Vehicle Licensing Agency (DVLA) runs computer tests every month to check whether the owners of cars registered in the UK have paid tax.
If the system flags up an untaxed vehicle that is not declared SORN (not on the road), the DVLA will send a fine of £80 to the owner.
If this is paid within 28 days, a 50% discount should be applied.
If the fine is not paid, however, the case could be sent to court, which could lead to a fine of up to £1000.
The car can be clamped by the DVLA until the correct amount of tax is paid.
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