Alastair Kendrick of international accountants Mazars, said:

"The proposed rules for the changes to capital allowances on company cars are in line with earlier announcements and will have a significant impact going forward. 

"The changes will affect cars acquired after April 2009.

"Whilst they will make it easier to prepare the taxation computations for those owning the vehicles and employers who hire vehicles, it will mean that costs increase.

"The intention is to create two pools of vehicles with a higher level of writing down allowance available for the more CO2 friendly vehicles (those with a CO2 emission below 160g/km).

"The government are to be congratulated on making the rules easier to follow but the real impact is the delay before the relief becomes available, which is likely to mean that leasing concerns will have to reflect this delay in their costs.

The data released in the pre-Budget report shows that the population of company cars is down to 1.1 million from 1.6 million in 1999.

The capital allowance changes are unlikely to do anything to stop the numbers declining further.

It is important that employers now review the impact of these changes in their fleet costs and decide upon their future policy."