Fleet News

Car makers get three-year warning to cut emissions

CHANCELLOR of the Exchequer Gordon Brown has given car makers a three-year warning to cut their list prices and improve their vehicles' emissions. His outline of the new benefit-in- kind tax regime for April 2002 will increase the focus of company car drivers, and particularly user-choosers, on a car's list price and environmental credentials.

But it also raises questions over which emissions will count when it comes to drivers' tax bills - carbon dioxide, or particulates and nitrogen oxides? Clive Tulloch, tax partner at PricewaterhouseCoopers, said: 'We do not know if the Chancellor will have emission bands for cars, or a continual progression, but a car's emission figure will become very visible and very significant, and that must cause a behavioural change among both employers and employees.'

He signalled the distortions created by the old company car tax system which was based on a car's cubic capacity, and led manufacturers to develop entire ranges of engines which scraped under the cubic capacity thresholds. Those cars whose engines fell just the wrong side of the tax thresholds suffered showroom death.

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