Drivers are being warned that they could be slapped with extra car tax costs as Labour could be planning a "tax grab" in the upcoming Autumn Budget.
Chancellor Rachel Reeves is set to deliver the Budget on Wednesday, November 26, where she will outline the Government's plans for spending.
Labour has already warned of a £50million funding black hole as experts hint at the Chancellor potentially hiking taxes for Britons.
A fresh warning has now come from the Shadow Transport Secretary, who has warned that hundreds of thousands of drivers could face new taxes.
Richard Holden suggested that Labour could target motorists with additional taxes in a bid to claw back money for the Treasury.
Speaking to Classic Car Weekly, he warned that Rachel Reeves could target owners of historic vehicles by removing the current exemption on car tax.
The Conservative MP for Basildon and Billericay said: "One of my big concerns is what's going to happen with the 40-year-rule and things like that with the Budget coming up.
"And I think my priority at the moment is to make sure that we don't end up seeing a tax grab on the sector at the Budget."
The Shadow Transport Secretary has warned that Rachel Reeves could target car tax in the upcoming Budget
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He described the tax exemption status as his "number one priority" for the classic car industry, warning that Labour could be looking "right across transport".
Vehicles are exempt from paying Vehicle Excise Duty (VED) if they are older than 40 years old, meaning any cars built before 1985 do not have to pay tax.
If a motorist does not know when the vehicle was built, but it was registered before January 8, 2085, they will not need to pay vehicle tax.
A Treasury spokesperson told GB News: "The Chancellor makes tax policy decisions at fiscal events. We do not comment on speculation around future changes to tax policy."
Drivers are exempt from paying tax on classic cars if they are over 40 years old
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The tax exemption has helped the classic car industry flourish across the UK, with estimates suggesting that the sector supports over 100,000 jobs.
Data from the Historic and Classic Vehicle Association (HCVA) shows that the annual turnover of the sector was £18.3billion in 2020.
Owners of classic vehicles must apply for a vehicle tax exemption to stop paying, which is often referred to as putting a vehicle into the "historic tax class".
Drivers can visit the Post Office to apply for a vehicle tax exemption. They will need the V5C vehicle log book, the V11 reminder letter, evidence of a current MOT, if they need one, and evidence that it is exempt from an MOT.
The Post Office will send the log book to the DVLA, with the agency sending back an updated log book. If drivers are owed a refund, they will receive one within six weeks.
The process is slightly different for motorists in Northern Ireland, as they require a valid MOT certificate when the tax starts and an insurance certificate.
Vehicles that are older than 40 years also benefit from not needing an MOT, provided no "substantial changes" have been made to the vehicle in the last 30 years.
However, drivers of historic vehicles can still be slapped with a hefty fine worth £2,500 if they use a vehicle in a dangerous condition. They can also receive three penalty points on their licence.