THE first report from the House of Commons Select Committee on Environmental Audit has called for an immediate change to company car taxation. Business mile tax breaks for company car drivers are right in the report's firing line, following a submission to the committee from Friends of the Earth.

The FoE report said: 'I to find a better example of where the tax system does exactly the opposite to the Government's aims of sending clear signals about which economic activities it wishes to encourage.' As a result, the committee recommended that the Government should address the incentives in the taxation of company cars as part of its integrated transport policy. It also suggested the Government should investigate the impact of introducing differentials to vehicle excise duty rates, based not only on a car's engine size and fuel efficiency, but also its emission standards for regulated pollutants and for carbon dioxide.