The Society of Motor Manufacturers and Traders is calling for wider tax reviews aimed at increasing sales across the car and commercial vehicle markets in Alistair Darling’s Budget on Wednesday.

The body also reiterated its calls for the introduction of a scrappage scheme.

The SMMT believes the Budget will be a decisive moment for the automotive sector going forward in the UK.

The SMMT has outlined what it wants to see in the Budget:

• Removing or delaying the planned 2010/2011 introduction of a first year rate of tax on new cars.
• Increasing the Annual Investment Allowance for businesses to £500,000 to boost spending on vans, trucks, construction equipment, buses and coaches.
• Enhancing the Reduced Pollution Certificate discount for trucks, buses and coaches to incentivise the purchase of Euro 5 vehicles through reduced VED rates.
• Deferring the new CO2-based business car capital allowance regime to 2010/11 to avoid tightening the squeeze on cash flow for business car users.
  • Delaying the introduction of the new standard Benefit-In-Kind (BIK) tax regime for the use of demonstrator and stock-in-trade cars to ease the unplanned cost adjustment burdens facing many employers and employees.
• Removing the 3% diesel car penalty in the company car BIK calculation.
• Encouraging enhanced vehicle replacement in government departments and agencies in 2009 and 2010.

Paul Everitt, chief executive of SMMT, will give his reaction to the media on Wednesday after the details of the Budget have been revealed.

He told the Daily Telegraph: "Bluntly, i don't want to be standing up and saying: it's sort of all right.

"I want to say: This is fantastic, this is the best time for you to buy a car."

Everitt believes that any Government attempt to dilute the scrappage scheme, like asking for the industry to commit cash or focusing on incentives on a particular type of vehicle are likley to condemn it to failure.