Green vehicle fleet policies that promote low emission company cars are likely to receive a boost in next week’s budget (March 12), predicts leasing company Alphabet.

"A new system of capital allowances linked to cars' CO2 emissions will affirm the tax-favoured status of company cars that are at the greenest end of the spectrum of cars on the road today," said Mark Sinclair, director, Alphabet.

Mr Sinclair expects that companies will be able to gain a cashflow advantage from more favourable capital allowances if they lease or buy cars in categories A and B of the Government's CO2 classification scheme.

If the proposed reform gets the go-ahead on Wednesday, firms will also be able to claim writing down allowances on mid-range company cars more easily.

"As more elements of the carbon taxation regime fall into place, businesses that rely on company cars can plan ahead and budget with confidence," he said.

"Company cars are newer, safer and usually less polluting than private cars used on business, so that is good news. “