The Government announced that the reform to company car taxation introduced in April 2002 has resulted in fewer business miles being travelled and a shift to more fuel efficient cars, resulting in a significant reduction in carbon dioxide emissions. The Government will analyse further the impact of the reform in making decisions about company cars in future years.

The Government will announce the outcome of the review of the taxation system of company vans in the 2004 Budget.

The Government has decided that the environmental benefits offered by LPG no longer justify the level of duty differential it currently receives. The Government will gradually increase the duty rate for LPG over the next three years bringing the amount of duty in line with its environmental benefits.