What Car? Q&A - Euro IV

Q: I have been told to change my company car as it is three years old, and want to save some money. I am looking at getting a BMW 530d. Is this car subject to the 3% diesel levy? My accountant has added it in, but I’ve been told that because it is Euro IV emissions compliant it isn’t applicable.
Jim Hiscock

A: The 530d does meet Euro IV emissions regulations and so is not subject to the 3% penalty on diesels in the company car tax scheme, as long as it is registered before January 2006.

After this time, the Euro IV standard becomes a requirement for all new cars to meet, so the Government will scrap the rebate for them. All cars registered after this date will pay the extra 3%, including the 530d.

Some manufacturers, such as Ford and Saab, are offering buyers the choice of Euro III or Euro IV engines up to the January deadline. Although they don’t meet other emission requirements that make up the Euro IV standard, many have lower carbon dioxide emissions, which are used for calculating tax bands. Combined with cheaper list prices, they’ll be cheaper to tax and could also provide improved combined economy.

Compare performance figures to see if a Euro III option could save you money over a Euro IV engine.