Diesel fleet reviews likely

Employers are expected to conduct widespread fleet reviews following changes to the way diesel cars are taxed.

The Chancellor made the announcement in the Pre-Budget Report in December which will force organisations to see whether it is still tax efficient to offer diesel company cars.

Currently, employees that drive a diesel car that meets the Euro IV emission standard get a 3% tax break incentive to do so. However, from January 2006 this incentive will be abolished.

Alastair Kendrick, tax expert at accountancy firm Ernst & Young, said: “Employers will have to reconsider petrol because this takes away the attractiveness of offering diesel.”