The Inland Revenue has apologised after claims that its tax office in Middlesbrough told a Fleet News reader that all new diesels meet Euro IV emissions standards and therefore avoid the 3% diesel surcharge imposed under the new emissions-based tax regime.
Mary Sullivan, Inland Revenue policy adviser, said: 'If one of our offices has done this then I apologise to your reader.'
Joanne Hanafan, of the fleet/facilities department at King UK, told Fleet News that tax advisers had misinformed one of her drivers about the new benefit-in-kind rules relating to diesel vehicles.
The driver of a Volkswagen Bora 1.9 TD PD (100 bhp) called the tax office in Gateshead to check his tax code and was told that because he had just taken delivery of a 'new' diesel engine car it must meet Euro IV emissions standards.
Consequently, the driver was advised that the 3% supplement would be waived and his tax coding would be set up based on 15% of list price. Under the new tax system, diesel cars incur a flat rate 3% penalty unless they meet strict Euro IV emissions standards.
Because the Volkswagen Bora 1.9 TD PD emits 143g/km, it will incur a benefit charge of 18% (15% plus the 3% diesel supplement) of its £13,665 P11D price, equating to £541 per year for a 22% taxpayer. Without the 3% penalty, the same driver would pay £450 - a saving of almost £100.
A Volkswagen spokesman said there were no Euro IV Volkswagen diesels available in the UK, adding: 'The earliest we expect to see them in the UK is in January 2003.'
The Revenue has already issued a wealth of information for its staff on the changes to company car tax, and if this latest misinformation proves to be widespread, it could issue a specific internet message to its officers.
Fleet decision-makers already face a mountain of paperwork after a computer error at the Inland Revenue led to hundreds of thousands of company car drivers receiving the wrong tax codes.