Review
Admittedly, the talent of the great artist cannot be denied, but while gallery owners will marvel at the painting genius that put a woman's nose where her ear should be, when it comes to company car tax, fleet managers would prefer a simpler picture.
It almost started so well, with an idea for a carbon dioxide-based system designed to reward fuel efficient, low CO2-producing cars to meet the Government's international commitment to slash emissions of the greenhouse gas. But then the fear of diesel emissions' effect on health in urban areas led to a new idea for an arbitrary 3% supplement.
In the November pre-Budget Report, Chancellor of the Exchequer Gordon Brown offered to remove the 3% penalty if diesel engines meet Euro IV engine standards. While such standards lower oxides of nitrogen and particulates, they may increase CO2 levels, changing the goalposts away from a solely CO2-based regime and altering the face of the company car tax system in one go.
Fellow drivers of our long-term Citroen Picasso will be familiar with its quite gutsy and smooth 90bhp diesel engine, which meets Euro III standards, achieves just under 50mpg in everyday use and produces 147g/km of CO2.
Under the current system, the driver should pay tax based on 15% of list price because the emissions are under the 165g/km starting point for the tax regime in 2002. But the 3% supplement means an 18% charge. However, if Citroen managed to boost the performance of its engine to Euro IV standards, there is a risk of increasing CO2. The car may save 3% in tax, but the CO2 emissions only need to rise 3g/km before the CO2-based Vehicle Excise Duty rate rises from ú110 to ú130.
This is not a great increase, but exactly what sort of message is that putting across? As Eric Morecambe once famously said when accused of playing the wrong tune on a piano: 'I am playing all the right notes - but not necessarily in the right order.'
John Maslen
