Company Car Tax Reform

In April 2002, the UK Company Car Tax system was revised so as to be made carbon-based. All company cars first registered after January 1998 are taxed on a percentage of their list price according to CO2 emission bands, measured in grams per kilometre (g/km). The reform was intended to remove the perverse incentive in the existing system to reduce the tax due by driving unnecessary, extra business miles and to provide a significant incentive to company car drivers to choose more fuel-efficient vehicles.

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