“For those firms with a fully-owned fleet, they will see further rises in VAT-related funding costs which can't be claimed back for cars doing private mileage. In that respect, contract hire protects firms against the worst of the tax burden, because 50% of the VAT can be reclaimed,” says Hogsden.

Earlier in the year, Lex Autolease polled a number of company finance chiefs on their understanding of VAT. One in five admitted to not knowing how much extra VAT they have incurred since the last increase.

A similar number - 23% - claimed the higher rate has generated no extra company car costs on their fleet.

"A large proportion of firms don't understand how VAT impacts on the whole life cost of company cars,” says Hogsden.

"Firms do need to pay attention to the funding element of their fleet leasing costs, which is subject to disallowable VAT at 50%. So, for those running cars for business and private use, they will find the tax take is going to be larger."

The changes to VAT and therefore BIK will also have a detrimental impact on companies’ National Insurance costs.

The other major announcement in the Emergency Budget for fleets is the changes to the writing-down allowances.

The rates of writing-down allowances will be cut for new and unrelieved expenditure on plant and machinery from the current 20% to 18% per annum for expenditure allocated to the main rate pool; and from 10% to 8% for expenditure allocated to the special rate pool.