THE Fiat Punto will become one of the first cars on sale in the UK with a Euro IV compliant diesel engine next year.

Fiat has announced a new 16-valve 1.3 JTD engine which cuts emissions to a level low enough to fall within Euro IV limits, meaning company car drivers will not have to pay the 3% diesel supplement in their tax bill.

The engine offers a 10% improvement in fuel consumption over the 1.9 JTD, and it develops 70bhp at 4,000rpm.