Ultra-low carbon cars will have their company car tax halved for five years as part of proposals outlined by Chancellor Alastair Darling in this year's Budget.
Cars which emit between 1 and 75g of CO2 per kilometre will see the 50% drop in the percentage of list price subject to company car tax.
In December’s pre-Budget report, Darling announced zero-carbon vehicles would be exempt from company car tax for five years, and now ultra low-carbon will make tax savings.
These measures will become law in the Finance Bill 2010.
Ben Creswick, head of business development at fleet provider Zenith Provecta, said: “It has not been a big Budget for the fleet industry but it these measures are helping towards driving down CO2 emissions and ensuring people look after their carbon footprint.”
Currently, there are no cars on sale in the UK with carbon emissions below 88g per km, but Creswick said halving the company car tax rate would make manufacturers work more quickly to develop a car with emissions below 75g per km.
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