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Citroen Xsara Picasso 2.0 HDI SX - 6,100 miles



##citpic.jpg --Right##PABLO Picasso, the artist whose name adorns Citroen's mini-MPV, provides a good analogy for the way the Government has handled the new CO2-based company car tax system. This is not because those in power should be congratulated for producing a wonderful masterpiece, but rather because their description of a modern tax system looks like a complete mess to everyone else.

Admittedly, the talent of the great artist cannot be denied, but while gallery owners will marvel at the painting genius that put a woman's nose where her ear should be, when it comes to company car tax, fleet managers would prefer a simpler picture.

It almost started so well, with an idea for a carbon dioxide-based system designed to reward fuel efficient, low CO2-producing cars to meet the Government's international commitment to slash emissions of the greenhouse gas. But then the fear of diesel emissions' effect on health in urban areas led to a new idea for an arbitrary 3% supplement.

In the November pre-Budget Report, Chancellor of the Exchequer Gordon Brown offered to remove the 3% penalty if diesel engines meet Euro IV engine standards. While such standards lower oxides of nitrogen and particulates, they may increase CO2 levels, changing the goalposts away from a solely CO2-based regime and altering the face of the company car tax system in one go.

Fellow drivers of our long-term Citroen Picasso will be familiar with its quite gutsy and smooth 90bhp diesel engine, which meets Euro III standards, achieves just under 50mpg in everyday use and produces 147g/km of CO2.

Under the current system, the driver should pay tax based on 15% of list price because the emissions are under the 165g/km starting point for the tax regime in 2002. But the 3% supplement means an 18% charge. However, if Citroen managed to boost the performance of its engine to Euro IV standards, there is a risk of increasing CO2. The car may save 3% in tax, but the CO2 emissions only need to rise 3g/km before the CO2-based Vehicle Excise Duty rate rises from ú110 to ú130.

This is not a great increase, but exactly what sort of message is that putting across? As Eric Morecambe once famously said when accused of playing the wrong tune on a piano: 'I am playing all the right notes - but not necessarily in the right order.'

John Maslen

CO2 emissions and fuel consumption data correct at time of writing. The latest figures are available in the Fleet News fuel cost calculator and the company car tax calculator.

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