TAX-efficient structured personal car leasing schemes could be killed off if they become too popular and starve the Government of benefit-in-kind tax income. If rocketing demand for the schemes threatens to destroy the financial estimates already made for an increase in the number of company cars, legislation could be in place to stop them in their tracks by 2004.

However, the Inland Revenue is insisting that it has no reason to believe the schemes will become popular enough to undermine its financial plans and says it is far too early to make any estimates. This week, the Inland Revenue reaffirmed its position that there would be an increase in demand for company cars - up from 1.7 million to about 1.9 million as a result of April 2002's change in benefit-in-kind tax to a regime based on carbon dioxide emissions - despite claims from suppliers of personal car leasing schemes that they could take a major slice of the fleet market.

Mary Braim, Inland Revenue policy adviser on transport benefits, said: 'We have not thought about the effects of structured personal leasing schemes as there is no reason to yet.' But she warned that if demand for structured personal leasing schemes increased and that led to an unexpectedly large downturn in the number of company cars on the UK's roads, the Inland Revenue might take action. She said: 'We will have to wait and see what the result is. If we are seriously unhappy, then action would have to be taken.

'Certainly, nothing could be done in a hurry. We would have to decide if there was a really serious problem, we would need to get approval from ministers, go to law and enter changes in the Finance Bill. That would mean any change would be very unlikely before 2004 or 2005.'