Drivers could face 'five per cent surcharge' when renewing car tax as DVLA issues update

It posted: "When you set up a Direct Debit for vehicle tax, it will renew automatically when it’s due to run out – so there's no need to worry."

The DVLA also provided a link to its website which allows motorists to set up their Direct Debit.

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Drivers can do this online or at a Post Office, with people not needing to be the vehicle's registered keeper to set up a Direct Debit.

Despite this, any emails and letters about Direct Debit payments are sent to the account holder.

If someone pays annually, they will not have to pay a surcharge. However, anyone wanting to pay their car tax either monthly or every six months will need to pay a five per cent surcharge.

This could see motorists have to pay even more for their car tax, especially at a time when Vehicle Excise Duty rates are being hiked following the Autumn Budget.

It was announced that the Government would uprate standard VED rates for cars, vans and motorcycles, excluding first year rates for cars, in line with the RPI from April 1, 2025.

First year VED rates will also rise from April to widen the differentials between zero emission, hybrid and internal combustion engine cars.

While this will see zero emission car owners pay the lowest first year rate of £10 until 2029-2030, owners of more polluting vehicles could see their rates double.

For all cars that emit more than 76g/km of CO2 and above, rates will double from their current levels. The highest rate - more than 255g/km of CO2 - will see prices rise from £2,745 to £5,490.

Motorists will need their address, date of birth, bank or building society name, account number and sort code. This cannot happen if an account needs two signatures.

From this point, drivers will receive a confirmation by email or post that their Direct Debit has been set up correctly.

The DVLA maintains that the first payment will not be taken until the vehicle tax has started, which can sometimes take up to 10 days.

To ensure consistency, all following payments will be taken on the first working day of the month that the Direct Debit is due.

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The DVLA frequently takes to social media to inform drivers of any changes to its services or remind them to renew their car tax.

The agency has made a massive investment into its digital services over the last year, primarily through the "Driver and vehicles" account.