New figures from HM Revenue & Customs show a drop in the number of drivers paying benefit-in-kind tax on company cars.

The figures released last week for the tax year 2009-10 show 970,000 people paid BIK on a car, down 40,000 on the previous year, with HMRC predicting a further 20,000 fall for 2010-11 when those figures are revealed next June.

The numbers compare with 1.2 million people in 2004-05, and have consistently fallen each year since the 1.16 million of 2006-07, although the rate of decline has slowed. Since

2004-05, the company car tax take from the Government has dropped by £270 million to £1.15bn.

The picture is more dramatic for those people claiming fuel benefit, with Government taxation changes discouraging the offering of private fuel as a benefit.

The number of people paying tax on free fuel dropped from 410,000 in 2004-05 to 270,000 in 2009-10, with another 30,000 predicted to come off that in the 2010-11 figures.

"This is the evidence that whatever people are saying about growing numbers of company cars, that is not the case," said tax expert Alastair Kendrick.

"At some point we'll hit the figure where it will slow down. We don't want to see essential users coming out of company cars because of the duty of care issues, but it's still in decline."

Kendrick also predicts that the Government changes to BIK levels, designed to restore some of the lost Treasury revenue, could lead to firms reviewing their policies in the wake of increasing BIK payments for their employees.

Bands will rise by 1% per year until the 2% increase announced for April 2015, which Kendrick believes will decrease the appeal of company cars for perk users.