VED - or car tax, as it's often referred - went under the radar in the Budget. Like most years, an increase in rates in-line with the Retail Price Index was buried in the official document and means the cost of taxing a car is likely to increase for most drivers over the next 12 months.
How do the VED increases impact you? We have detailed all the changes based on the age of the car you drive...
When motorists buy a new car, they are stung with a first year tax rate - also known as a 'showroom tax rate' - based on the CO2 emissions of the vehicle they purchase.
After this first year showroom tax, owners will then have to pay a fixed-price standard tax rate (which you can find in the next section below).
The impact of the latest RPI hike has increased VED for every car buyer bar those purchasing fully-electric and plug-in hybrids vehicles that emit less than 50g/km CO2.
And some of the increases drivers will experience are significant.
For buyers of the latest petrol and diesel cars with carbon emissions up to 150g/km, they can expect pay between £5 and £35 more than they would have done before 1 April.
Anyone buying a new motor with CO2 emission above 150g/km will be forced to pay an extra £35 to £140, with the most polluting models clobbered by a first-year showroom tax rate of £2,745.
If you drive a diesel car that fails to meet the Real Driving Emissions 2 (RDE2) standards for nitrogen oxide emissions, there is a supplementary charge. You can ask your car’s manufacturer if your car meets the RDE2 standard, though the Gov.uk payment website will automatically identify this and apply the additional charge.
If you own a car that was first registered between 1 April 2017 to 31 March 2024, the RPI hike will also translate to an increase in standard rate car tax, which is paid from the car's second year onwards.
This has been upped by £10, rising from £180 to £190 for petrol and diesel models and increasing from £170 to £180 for 'alternative fuel vehicles' (hybrids and plug-in hybrids).
The standard rate of VED for zero-emission electric vehicles (EVs) bought during this period is wavered, but EVs will face taxation from next under new rules proposed by Mr Hunt in 2022.
As well as increasing the standard rate for vehicles with a combustion engine, there has also been a hike to the additional 'premium' rate tax on all models purchased after 1 April 2017.
This premium rate impacts all cars that cost more than £40,000 when they were new and is paid on top of the standard rate for five years (from year two to year six).
This premium tax was introduced in 2017 and has proven an unwelcome hit to the pockets of motorists purchasing larger models, particularly expensive SUVs.
And the cost of this 'expensive car' tax has risen by £20-a-year from £390 to £410 as of 1 April.
Looking back to the previous VED rates for 2022/23, the premium tax was £355, meaning it has increased by £55 in just two years.
It means owners of petrol or diesel cars dating back to 2018 with a 'list price' (the published price before any discounts) of more than £40,000 will be forking out a whopping £600 in standard rate tax this year, irrelevant of if it produces low CO2 or extremely high levels of carbon dioxide.
For those who bought a new combustion-engined motor before April 2023 and plan to keep it for six years, they can expect to fork out £3,000 on VED alone between now and 2028.
Hybrid owners are rewarded for driving something greener with a £10-a-year discount, meaning owners of £40k-plus models pay £590 for the year 2023/24.
Electric car owners are currently exempt from this premium taxation for now, but likely won't be from 2025 when owners of battery-powered vehicles are forced to start paying annual VED.
For older petrol and diesel cars registered between March 2001 and March 2017, your vehicle will continue to be classified by lettered VED bands based on CO2 emission outputs.
The impact of the the latest RPI increase from 1 April impacts all cars in this age bracket with CO2 emissions in excess of 121g/km CO2.
Annual VED costs will rise between £10 and £40.
It means the most polluting models with CO2 emissions over 255g/km will be forced to splash out £735 annually on car tax.
Under VED rules, any car that was registered over 40 years ago is no longer hit with car tax.
That means all cars registered before April 1984 is already eligible for 'historical vehicle taxation' exemption.
However, it is important to note that it is a vehicle keeper's responsibility to apply to the DVLA for a vehicle tax exemption so they can issue an updated log book to clarify that the car is eligible for charge-free historic vehicle tax.