SIMPLE calculations show the extent to which the new CO2-based company car tax system penalises high mileage drivers, the event heard. For example, an engineer covering more than 18,000 miles in a Ford.

Mondeo 1.8LX would currently pay company car tax based on 15% of list price, but from 2002 would pay according to the car's 185g/km CO2 emissions, so his tax would go to 19% in 2002/2003 and to 23% by 2004/2005. But a manager in a Ford Focus 1.6 Zetec with 167g/km covering less than 2,500 business miles would see his tax come down from 35% to 15% in 2002 before rising to 19% in 2004.