A spokesman for PricewaterhouseCoopers said: 'Drivers using larger, more expensive cars for business could be significantly worse off, from April 6, 2002. For example, if you actually incur costs of 50p per mile using your car for business and the Inland Revenue mileage rate is fixed at 40p per mile you will no longer be able to claim tax relief on the additional 10p incurred. A person doing 10,000 business miles in a larger car costing 50p per mile to run could be £400 worse off.'
Deloitte and Touche called for the fleet industry to create an action plan quickly to ensure that if changes were to be made, they would be before the new tax year on April 6, particularly as the future shape of the system was now clear. A spokesman said: 'After a period of uncertainty surrounding the future of Inland Revenue mileage rates, their publication means employers are now able to make clear decisions on whether to continue to offer company cars or pay cash allowances supplemented by tax and NIC-free reimbursements at the new rates instead.'