The new company car regime is based on CO2 emissions levels. Diesels suffer a 3% benefit supplement unless the car is a ‘clean’ diesel satisfying the ‘Euro IV’ conditions. At the time of going to print, the only one on sale in the UK is the Toyota Avensis. However, some employers are importing Euro IV diesel cars from countries where they are more readily available.
Employers need to ensure that such cars have a ‘statement of conformity’ confirming that the vehicle does meet the standard. Note that this is not currently recognised on the V5 vehicle registration document. Employers providing such cars should be aware that when completing the form P46 (Car)(New) they need to enter fuel type ‘L’ in part 2 of the form. This will ensure that the PAYE code is correctly set without the 3% benefit supplement being applied.