Politics: Mileage penalty for company cars

The Chancellor is to target company cars as part of a package of "green" taxes in a pre-Budget statement next Tuesday.

As part of the Government's attempts to dissuade people from using polluting vehicles, Gordon Brown will be changing the tax system to make the tax on company cars more geared to the miles business users travel. At present some of the 1.6 million business car users get a tax discount if they have a high business mileage. That system is to end, and business users in future will pay more for higher mileage, while those with low mileage will pay less tax.

The pre-Budget statement will be the first time that a Chancellor has opened his Budget box for consultation before producing firm proposals. Mr Brown will return in the spring with firm proposals in the Budget, and next week's package will be seen as an attempt to soften up public opinion for some potentially unpopular tax increases on motorists.