From 1 April 2008, the first registration fee for new car sales will rise 10 per cent from £50 to £55. The move is expected to generate an additional £11 million for the Treasury.
With new car sales forecast to reach 2.34 million over the next twelve months, total revenue from the tax will raise £128 million.
The fee was introduced in 1998. Originally, it was set at £25. However, successive rises have seen it more than double in a decade.
'We hope this is not a move by the Treasury to plug holes in its finances,' said SMMT chief executive Paul Everitt. 'In the grand scheme an extra £11 million in tax and a fiver for new car buyers might not sound like much. However, we fear that this every-little-helps approach could be the basis for further changes to motoring taxes in March's budget.'