Mazda Diesels Pave The Way For Tax And Fuel Efficiency

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Mazda is gearing up for a fleet sales explosion in 2003 and tax and fuel-efficient diesel engine models are set to play a significant role in winning new business.

Legislative changes from 6 April that see the tightening of benefit-in-kind tax and the introduction of a new carbon dioxide emissions-based fuel benefit charge system play to the strengths of diesel.

CO2-friendly and fuel efficient 1.4 and 2.0 litre common-rail diesel engines in the much-praised Mazda6 and the soon-to-be-launched Mazda2 supermini, will be highly sought after by company car drivers and fleet decision-makers looking to make cash savings in 2003/04.

The company car tax system tightens two notches from 6 April. That means the CO2 tax threshold will be reduced by 10 g/km – a further 10 g/km reduction will occur from 6 April, 2004 – which will mean the lowest 15% tax charge applying to cars emitting 159 g/km instead of the current 169 g/km from April. In addition non-Euro IV compliant diesel engine cars remain subject to a 3% tax penalty.

However, the driver of a Mazda2 1.4 TDCi 67 bhp, which has a CO2 figure of 119 g/km, will see their tax bill unchanged at least until April 2005 at 18%. The benefit-in-kind tax system beyond that date is not known. Therefore, the 22% taxpayer at the wheel of a Mazda2 1.4 S diesel will face a tax bill of just £31.64 a month.

Meanwhile, the driver of a Mazda6 2.0 D 119 bhp (172 g/km) will pay 21% tax in the forthcoming financial year and the driver of a Mazda6 2.0 D 134 bhp (174 g/km) will pay a similar rate. Fuel economy on the combined cycle for each model is 43.5 mpg.

Those figures contrast with the driver of a Vauxhall Vectra 2.2, which has a CO2 figure of 206 g/km. The driver of that car will see their tax bills rise from 23% in this financial year to 25% next year. Fuel economy on the combined cycle is 32.8 mpg.

So the 40% tax paying driver of the 134 PS Mazda6 TS will pay £111.44 a month in tax compared with the Vectra SXi driver’s £131.75 a month. Therefore, driving a diesel reduces the tax burden and offers improved mpg over a petrol-engined car.

Meanwhile, the new fuel benefit charge – applicable to employees who have a company car and are also provided with ‘free’ fuel for private use – will, like the company car benefit-in-kind charge, be linked directly to a vehicle’s CO2 figure. The new structure replaces the long-established car engine size-based fuel scale charge system.

To calculate the benefit charge on ‘free’ fuel the CO2 percentage figure – the same as that used to calculate company car tax – must be multiplied against a set figure for the year. The 2003/04 figure is £14,400. Therefore, one way to offset any fuel charge increase is to choose diesel.

Currently the 40% tax-paying driver of a Mazda6 2.0 D 134 bhp will have a ‘free’ fuel tax liability of £1,140 a year or £95 a month – the same as the driver of a Nissan Primera 2.0i.

However, from 6 April, the driver of the Mazda will see his tax bill rise fractionally to £1,209.60 a year/£100.80 a month (£14,400 x 21% = 3,024 x 40% = £1,209.60), but the Nissan Primera driver with higher emissions (205 g/km) will see his tax bill rise to £1,440/£120 a month. The Mazda also returns 10 mpg more than the Nissan.

Finally, with National Insurance rates also increasing from 6 April employers will pay lower Class 1A NIC on the Mazda than the Nissan.


Published : 06/03/03 Author : Melanie Carter

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