Company car tax

In the Budget 2004, the Government announced that the level of carbon dioxide emissions qualifying for the minimum charge in 2006/2007 will be frozen at 140 grams per kilometre. This is the first time there will be no change in the minimum level from one year to the next since the carbon dioxide-based company car tax system was introduced in April 2002. The Government believe that this system has been successful in reducing business mileage and lowering carbon dioxide emissions by encouraging the use of more fuel efficient and cleaner cars. However, the Government have decided to freeze the minimum level in 2006/2007 to give them more time to assess the impact of the system fully while providing enough information about future rates to enable motorists and fleet managers to make their decisions.

Company car fuel

In April 2003 the system for taxing fuel provided for private use in a company car was reformed to follow the company car system using carbon dioxide emissions. The same percentages (as calculated for company car tax) were applied to £14,400. This figure of £14,400 will be frozen for 2004/2005 to enable this system to settle.

Company vans

Budget 2004 announced a major change in the rules for the charge for employer provided vans. From 6 April 2005, employees who take their vans home at the end of the day, so that they can drive them straight to customers in the morning, will not have to pay any tax on the benefit in kind providing there is no other private use. For employees who are allowed unrestricted private use of their vans, the benefit in kind charge will remain at £500 (£350 for older vans) for 2005/2006 and 2006/2007. From 6 April 2007, the benefit in kind charge for employees who have unrestricted private use of their vans will be £3,000 and there will be a charge of £500 for employer provided private fuel.

Vehicle Excise Duty

Budget 2004 froze the Vehicle Excise Duty (VED) rates for all cars.

Road fuel gasses

The Government acknowledged that the road fuel gas sector faces a number of challenges which it must meet if these fuels are to continue to provide cost effective environmental advantages over conventional fuels.