COMPANY car drivers can expect a nasty shock this month when they discover how much more tax is being taken from their wages. Chartered accountants warn that many could find themselves hundreds, and even thousands, of pounds out of pocket due to the introduction of changes in the taxation of company cars.

Linda Wiggins, president of the South Eastern Society of Chartered Accountants, said the changes would only become apparent when April salaries were paid. "Then the reality will hit home, and although some people will actually pay less tax, others will have to face up to the higher cost of using a company car," she said.

The winners will be people who drive small, economical cars and who travel less than 2,500 miles a year on business. Under the old rules, they were taxed at the highest level. Users of large cars who travel more than 18,000 miles a year on business will be hardest hit by the switch to an emissions-based system.

Mrs Wiggins said it made good sense for firms to review the way in which employees were provided with cars. "Companies may be able to save money for themselves and their employees by looking at other solutions such as cash alternatives, or personal contract purchase, especially where they have been providing cars as perks," she said. The Government is expected to tighten emissions penalties over the next few years.

*Emission figures can be found on websites that carry environmental data by model. Look up your model on www.dltr.gov.uk or www.4car.co.uk