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Diesel-electric hybrids face 3% BIK penalty

Date: 19 May 2011   |   Author: Tristan Young

Diesel-electric hybrids, the first of which are set to go on sale later this year, will be subject to the same 3% benefit-in-kind penalty that hits regular diesels for company car taxation unless industry lobbying is successful.

Peugeot's 3008 hybrid, which goes on sale in October, and Mercedes' E300 hybrid, due out in 2012, will both be penalised for being diesels, despite being partnered with electric motors and offering significantly better economy and emissions than equivalent petrol or diesel vehicles.

A SMMT spokesman said: "We're keen to see the 3% go altogether. The SMMT is putting pressure on Government whenever we have meetings with or write to the appropriate politician."

The diesel penalty was originally introduced because the fuel was seen as being more polluting at a local level than petrol, because of greater levels of particulate, or soot, emissions. However, modern diesel engines are now equipped with soot traps to reduce this problem.

Peugeot said it is also lobbying Government for a removal of the 3% penalty on diesel-electric hybrids. A spokesman for the company said: "We're pursing this issue and are in on-going discussions. It's in our customers' interests to point out that the 3% penalty isn't fair. All we're after is parity on the matter."

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