Companies which buy ultra-low emissions cars will benefit from an extension to the 100 per cent first year tax allowance, as well as new company car tax rates for the lowest emitting cars.

George Osborne announced: "From April 2015, two new company car tax bands will be introduced at 0-50g/km C02 and 51-75/km C02."

John Lewis, chief executive at British Vehicle Rental and Leasing Association, welcomed the news, saying the benefits for low-emission company cars would ensure they remained an attractive proposition for drivers. "This move will reassure thousands of potential drivers," he said.

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