For the past few years a 100% first year allowance (FYA) could be claimed by businesses on capital expenditure on low CO2 emission cars. From 1 April 2013 the definition of a low CO2 emission car is changing, making it tougher to qualify for this relief.
Generally, to qualify for the 100% FYA the expenditure must be:
- to purchase a low CO2 emission car; and,
- on a car that is unused and not second hand (although demonstration cars can also qualify).
Until 31 March 2013 a ‘low CO2 emission car’ is one with CO2 emissions of not more than 110g/km.
From 1 April 2013 the definition of low CO2 emissions is falling to 95g/km.
This can obviously be a very valuable tax break, but time is running short to utilise it before the definition changes
There are many tax implications to consider when purchasing or leasing cars. We recommend that you contact us for advice when considering making a change.
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