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Government offers first Euro5 tax breaks

Date: 07 September 2007

The Department for Transport has revealed it will extend one of its green tax incentive schemes to include Euro5 vehicles for the first time.

The Reduced Pollution Certificate scheme will be extended so that hauliers and bus operators first registering a Euro5-compliant vehicle before 1 October 2009 can claim a discount of up to £500 a year on Vehicle Excise Duty.

Although the scheme only applies to HGVs, it is understood the move is yet another signal that Euro5 cars will also be given a tax incentive in the near future, possibly the 2007 Pre-Budget Report scheduled for mid-October.

Speculation has been mounting that the Government could offer a benefit-in-kind tax incentive for Euro5 business cars similar to the 3% reduction offered to encourage the introduction of Euro4 diesels at the start of the decade.