Car tax will rise for millions of drivers next month

The majority of motorists in the UK will have to pay about £5 more each year, in line with rising inflation.

Vehicle Excise Duty (VED) is set to rise for the third consecutive year.

It was announced in the Budget that: "From April 1, 2019, VED rates for cars, vans and motorcycles will increase in line with RPI."

For most drivers, the annual cost will go up by about £5. However, those with older models that are outputting higher emissions, could face an additional £15 charge, and anyone who buys a new model after April 1, 2019, could be hit by a £65 hike for the first-year tax rate.

The increased rate is part of a government plan to pay for most future road repairs through taxes on motorists.

VED is calculated based on the CO2 emissions of a vehicle and the age of the car, unless it was registered prior to March 2001.

For cars that were first registered on or after April 1, 2017, the standard annual rate will rise by £5 to £145.

For vehicles registered between March 1, 2001, and March 31, 2017, cars with a CO2 emission of up to 120g/km will not see an increase. However, cars with high CO2 emissions will face a £15 rise.

Buyers of brand new cars will also be hit by an increase to their first-year rates. Vehicles with a CO2 emission of 90g/km or less will be unaffected while those of up to 150g/km will pay an extra £5.

Drivers whose vehicles emit more than 255g/km will be required to pay an additional £65 — up to £2,135 in its first year.