When the current company car benefit charge was introduced in April 2002, a 3 percentage point supplement was introduced for cars with diesel engines. However, the supplement does not apply to cars with diesel engines that meet the strict Euro IV emission standards. At present, therefore, petrol cars and Euro IV diesel cars with the same emission rating would have the same benefit charge.

The Chancellor has now announced that, as all diesel cars registered in the UK from 1 January 2006 must meet the Euro IV standards, the supplement will be reinstated for diesel cars with effect from 6 April 2006. However, the 3% supplement will not apply to cars with Euro IV standard diesel engines that were registered before 1 January 2006 for as long as they are used as company cars.

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Sources:
www.inlandrevenue.gov.uk/comp/index.htm