What Car? Q&A - Do diesel taxes still increase in 2006?

It is my understanding that the Government intend to remove the 3% Euro IV tax break for diesels in January 2006. Is this still the case because I have not heard any more mention of it of late?
Andrew Atkinson

A: Although Gordon Brown has eased the pain of motorists a little by postponing duty increases on fuel, he's had no change of heart on scrapping the 3% rebate for Euro IV diesels next year.

Unfortunately it's still going ahead from January, so every diesel engine registered from next year will pay the penalty. The cleanest and cheapest diesel, as a result, will find a home in the 18% tax band instead of the 15% bracket.

Register your car before the end of the year, however, and you'll enjoy the 3% rebate for the life of the car, however.

It's not all bad news though. Chancellor Gordon Brown froze the company car tax bands in the budget this March at their current levels until 2008.

Diesel advocates argue the increase doesn't make any sense as the engines emit less carbon dioxide and, thanks to their fuel economy, use less of the world's resources.

Opponents point to higher levels of localised pollution that cloud the environment with harmful particulate matter.