Organisations are moving back into company cars as they recognise that the benefits to them and their staff outweigh cash allowance schemes.

The latest figures from HMRC revealed that the number of benefit in kind company cars rose in 2006/07 to 1.16 million from 1.14 million in the previous 12 months – the first year-on-year increase since 2001/02.

It expects the 2007/08 figures to remain constant.

Roddy Graham, Leasedrive Velo commercial director, said: “There’s a perception that company cars cost more in BIK than they actually do and companies have been winding down their company car schemes over the last 15 years.

"But it’s a misconception.”

He told Fleet News that salary sacrifice schemes are the ideal route for companies looking to get back into company cars, especially with the high number of models that fall under the 120g/km 10% BIK threshold.

“The employee gets an aspirational model and the employer gets better wholelife costs, better fuel efficiency and corporate responsibility from a lower carbon footprint,” he said.

“It’s a no-brainer.”