AM Online

Diesel renaissance threatened by new fleet tax rules

Diesel new car sales rose by 36% from January to November this year to a total of 410,373 new cars, compared to 296,173 in the same period last year. At the end of November diesels had a market share of 17.6% for the year, compared to 14.1% for the whole of 2000.

The growth in market share is put down to the growing realisation of the economic benefits of making the change from petrol to diesel among company car fleets, with diesel cars returning more miles to the gallon.

From April, BIK will be based on a car's CO2 output. Only cars emitting less than 165g/km qualify for the lowest tax rate at 15%. For each 5g/km increment above 165g/km, drivers will be taxed an additional 1%. However, there are continuing fears of fleet diesel drivers being penalised with a 3% surcharge. SMMT chief executive Christopher Macgowan said: “After years of decline it is heartening to see diesel sales recover this year. As we continue to strive towards lower CO2 emissions it is important that the diesel advantage is recognised by car buyers and government alike.

“However the industry remains concerned the Government still aims to penalise diesel drivers under new company car tax rules by adding three per cent to their company car tax. In an age of cleaner, more fuel efficient diesel engines, the time has come to remove all diesel penalties.”

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