Every case is unique, and tailored advice needs to be given, but the general ground rules are, if you are a high business miles traveller (more than 18,000 miles p.a.) the company car route is probably best, but if you are buying a new car and likely to do less than 2,500 business miles, it is probably best to own the car personally.

In terms of the buying decision, the old maxim of "what deal you can do on a new car with cash" remains true. As new car prices continue to fall, good cash deals are increasingly available. Your decision depends on your cashflow.

In the Budget, the current system is to be replaced with one based on whether or not your car is environmentally friendly.

From April 2002, the amount of tax will be based on the carbon-dioxide emissions of your car with a minimum tax charge of 15 per cent of the car's list price each year. You then pay one per cent of the list price in extra tax for every five grams per kilometre of carbon-dioxide your car produces above 165 grams per kilometre.

The winners will be those who drive small or environmentally-friendly cars and those who drive few business miles. The biggest losers will be large executive car owners who will be taxed at 35 per cent of the list price, irrespective of mileage.

The other main change announced is in respect of the provision of free fuel for private motoring. This tax will increase by 20 per cent each year for the next two years.