The government is being urged to clamp down on untaxed foreign vehicles after the RAC warned they were costing the UK millions of pounds a year.

About 60,000 foreign vehicles are registered with the Driver and Vehicle Licensing Agency (DVLA) every year.

However, the RAC said an estimated 15,000 others are not - the motoring organisation said this amounts to about £3m per year in uncollected tax.

The government said it would shortly announce plans to combat the problem.

The DVLA was unable to verify how many foreign vehicles coming into the UK are not registered, but did not contest the RAC's figures.

The RAC's head of external affairs Pete Williams said the situation was "beyond belief".

Under current regulations foreign vehicles visiting the country must be registered with the DVLA once they have been in the UK for six months.

After that time vehicles must be taxed, insured and undergo an MOT, if older than three years.

High priority

But despite the UK Border Force gathering details of every non-UK vehicle entering and leaving the country, the information was not then used by the DVLA to check foreign vehicles, the RAC said.

Some untaxed cars may also not have a valid MOT certificate or have valid insurance, the motoring group added.

"Given the prevalence of technology such as automatic number plate recognition, it is beyond belief that in the 21st century two important government agencies - namely the UK Border Force and DVLA - are not already sharing information," the RAC's Pete Williams said.

He added: "We understand that DVLA, the UK Border Force and the police are looking at how data can be used to identify foreign-registered vehicles that have been in the UK for longer than six months, so we urge the government to make finding an effective solution a high priority."

A spokesman for the Department for Transport said it was aware of the issue and that discussions were "on-going across government" on how to improve the flow of information among agencies to tackle the problem.

The government will shortly announce "firm plans" to improve information sharing, he added.