PRIVATE and industry submissions to the Inland Revenue on the future shape of company car tax have called for diesel cars to incur a tax penalty. Such a premium would offset diesel's strong advantage over petrol under the proposed new system that will be based on a percentage of a car's list price, determined by carbon dioxide emissions.

The Inland Revenue has reported a flurry of submissions from company car drivers, fleet managers, industry companies and representative organisations as the deadline for its consultation period on the new benefit-in-kind tax regime passed on Monday. Sara Woollard, policy adviser to the Personal Tax Division, said: 'People are urging us to do something about diesel to recognise its local air pollutants. Company car drivers seem to be saying they are spending a lot of time in traffic jams and are fed up with diesel emissions giving them and their children asthma.'

She added, however, that many of the comments were directed at lorries, taxis and buses that are tarring all diesel vehicles with the same brush. 'Representative bodies have said they like the simplicity of the carbon dioxide-based system and said that, if there is anything done to penalise diesel, it should be kept as simple as possible and be kept under review because diesel technology is getting cleaner.'