Chancellor Gordon Brown revealed that cheaper company car tax could be offered to drivers who choose cars capable of using high-blend biothenal E85. The news was welcomed by executives at Saab, which has produced two flex-fuel cars, as ‘a first step’.
But LeasePlan bosses describe it as a ‘token gesture’ with managing director David Brennan commenting: ‘Currently there are very few cars on the market that can use bioethanol.’
Other measures announced were an increase in fuel duty in line with inflation, an extension of the 20ppl biofuel duty and forthcoming changes to the fuel scale charge, which will be based on a car’s carbon dioxide rating from May.
The government has been consulting on options for modernising relief for business expenditure on cars, including the provision of incentives to business to purchase cleaner cars.
In a statement, the British Vehicle Rental and Leasing Association said: ‘We welcome the news that the chancellor is to pursue modernising the taxation of business cars, getting away from the old £12,000 ‘expensive car’ writing down allowances.
The chancellor confirmed the concept of moving to a system to encourage business to use cleaner cars would be progressed with further detailed proposals to be confirmed in the 2007 budget.’
The government also said it would consider the case for incentivising the early uptake of Euro V.