What's happening?

On April 1, changes to car tax will come into effect.

Why?

George Osborne announced the changes in the 2015 budget, in response to falling car tax revenue due to more cars qualifying for the low-emission exemption.

Are all vehicles affected?

No. Cars registered before 1 April 2017 won't be affected, so if you're not planning to buy a new vehicle, this won't affect you. Most cars registered on or after that date will be affected.

Okay, are all new vehicles affected?

Zero-emission with a list price of less than £40,000 cars are exempt. Any other new car will be affected.

How so?

Here's what the Government says in its official document...

"The first vehicle licence will be calculated on the vehicle’s CO2 emissions.

"The majority of vehicles will then move to a standard rate of £140 annually from the second licence.

"Cars with zero emissions will not pay the standard rate of vehicle tax.

"However, if a car’s list price is over £40,000 at first registration, the customer will pay the additional rate [an extra £310 a year, so £450 a year overall] for five years after the end of the first licence."

The new system will have three classifications: zero-emissions, standard and premium.

Also, there will also be a five-year supplement of £310 a year for any cars costing more than £40,000. This supplement applies to zero-emissions vehicles too, and you can't negotiate with a dealer to bring the price below £40,000 - the tax is set according to the list price, approved by the DVLA.

So will I lose out?

Probably. The majority of new car buyers will and if you were planning to buy a low-emission car, then definitely. At the moment, those emitting 99g/km of carbon dioxide are exempt from road tax. New cars bought after April 1 will be exempt only if they have zero emissions, and people buying new low-emission cars will have to pay £120 in the first year, and £140 a year thereafter.

It's estimated that the changes will raise an extra £1.4 billion for the Government over four years.