The statistics show that there were 950,000 taxable company cars in 2010/11, down from 970,000 in 2009/10.

‘It is important to note here that we are not seeing a decline in the popularity of business cars. You only have to look at our own BVRLA member fleet sizes, the SMMT figures for fleet registrations or the government’s own forecasts to see that the number of business cars has increased over the past three years and that they will continue to increase in the years ahead as the economy pulls out of this latest recession.

‘What these BIK figures tell us is that the company car tax regime is beginning to tax some people out of private use. More people are deciding not to take a perk car or are only using company cars for business mileage. Others are paying a personal use contribution to their employer instead of paying BIK tax.

‘These statistics show that the government has to walk a fine line when setting emissions-based company car tax. The current tax is clearly having some negative environmental side effects if it is resulting in people opting to use their own, older and more polluting cars in order to do their private mileage,’ he added.