Volvo has welcomed an HM Revenue & Customs announcement stating the new Volvo V-60 Plug in hybrid will not pay an extra three per cent BIK tax usually applied to diesel cars.

This is because the usual three per cent tax (on top of standard tax rates) applies to vehicles that use pure diesel engines, which the Volvo doesn't because it's a hybrid.

The tax only applies to business cars and usually includes the surcharge for diesel cars because of the pollutants they emit.

Ultimately this means that the cost of running of the Volvo V-60 hybrid will be lower for businesses, along with other hybrids like the Citroën DS5 Hybrid4and Peugeot 3008 Hybrid.

Volvo Car UK's national corporate operations manager Selwyn Cooper, said "We are delighted that HMRC has both cleared up the confusion and acknowledged that the rightful banding for diesel hybrids is alongside its petrol hybrid siblings."

The Volvo V-60 plug in hybrid isn't just like any other hybrid though. A well as running on diesel and an electric motor, like other hybrids on the market, it can also be charged so that it runs completely on electric energy.

This new Volvo emits just 49g/km of CO2 emissions. But that's not to say it lacks when it comes to being a comfy and luxurious car.

The Volvo V-60 includes features like parking assist, leather clad steering wheel and plenty of storage space.

Volvo V-60 Plug in hybrid factfile

What is a Plug in hybrid?

A Plug in hybrid is a car that runs on diesel and an electric motor, but also has the option to charge electrically and run on electric power alone.

When is it out?

It is set to be released in 2012.

How much will it cost?

The prices are expected to be around the £24,000 mark.